Bitcoin’s expected price volatility has surged to its highest level since July, reflecting the growing intensity of the U.S. presidential election. Political betting markets indicate a competitive race between candidates Donald Trump and Kamala Harris in critical battleground states. This environment suggests that the cryptocurrency market is bracing for potential turbulence as key political developments unfold.
Implied Volatility Index Hits New High
According to data from Deribit, the largest cryptocurrency options exchange, Bitcoin’s implied volatility index has jumped to 63.24% on an annualized basis. This index predicts how much Bitcoin prices may fluctuate in the coming month, highlighting rising market concerns about an impending political and economic shift.
Moreover, the seven-day implied volatility has surged even higher, reaching 74.4% annually, significantly exceeding the actual price fluctuations of 41.4% observed this week. The political landscape is rapidly changing, particularly in Pennsylvania, a crucial swing state. Recent data from Polymarket shows that the likelihood of a Trump victory has decreased from 61% to 53%. A recent New York Times/Siena survey confirms that polling data between the two parties is exceptionally close.
Bitcoin Price Movement and Broader Market Impact
This political uncertainty coincides with notable volatility in Bitcoin’s price. After nearly hitting a new record of $73,500 earlier this week, the cryptocurrency has now fallen back below $68,000.
The effects of this uncertainty extend beyond the cryptocurrency sector. The Ice BofA Move index, which measures expected volatility in Treasury notes, has also seen a significant rise, climbing to 135%—the highest level since last October.
As the election approaches, both the cryptocurrency and broader financial markets are preparing for a period of increased volatility.
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