Trump victory may give crypto a 'dopamine hit,' but traders should be cautious

Many crypto industry pundits have predicted that a Donald Trump victory in the United States election on Nov. 5 could trigger a major crypto market rally.

“A Trump victory would likely provide a dopamine hit,” Swyftx lead analyst Pav Hundal told Cointelegraph but warned that markets would be more volatile in the days surrounding the election.

Derive founder Nick Forster believes “traders should approach with caution” as the market is currently pricing in considerable volatility. He warned that “while there might be an upside, the risks are equally significant.”

Referring to Derive options data, Forster claimed that traders are preparing for significant price movements around the election date.

“The increased buying of calls indicates some traders are indeed betting on a bullish outcome, potentially expecting a ‘buy the rumor’ scenario, but the reality could pivot quickly to a ‘sell the news’ dip depending on actual election outcomes.”

However, Hundal doesn’t see the election result “as the decisive factor in Bitcoin hitting $100K.”

He echoed a similar sentiment to 10T Holdings founder Dan Tapiero who said the asset is set to hit six figures regardless of which candidate wins the election.

“Barring some kind of exogenous shock, we’re looking at six-figure Bitcoin prices before year-end. Irrespective of who is in control of the White House.”

Whether traders should expect a “buy the news, sell the rumor” dump post-election or a crypto market surge if Trump wins the election remains uncertain, according to Forster.

Forster believes that traders with the capacity to implement a “diversified strategy” that includes hedging options would be better off than “outright buying,” particularly given the market’s “high sensitivity” to domestic and global news.

Meanwhile, Hundal isn’t overly worried about traders timing their trades unless they are highly experienced, as he remains confident in upward growth heading into 2025.

“I’m not sure timing your trades matters too much in this environment unless you’re a sophisticated investor looking for short-term arbitrage opportunities on the US election result,” Hundal stated.

“It’s entirely probable that the market will whipsaw on the US election result. But the underlying market fundamentals are pointing toward growth,” he added.

Hundal’s comments line up with those of FalconX’s head of research David Lawant, who said Bitcoin “is likely to perform well regardless of the election outcome,” in an Oct. 21 market report.

Crypto analysts suggest a Trump victory could give the crypto market a “dopamine hit,” but with considerable volatility already priced in, traders should remain cautious.There is a free opportunity to try to understand!