Authors: James Van Straten, Helene Braun, Coindesk; Translation: Wuzhu, Golden Finance

Summary

• Over the past decade, the average ROI of Bitcoin in the second half of October is twice that of the first half of the year.

• The options market shows a call bias for the expiration dates in November and December.

• The US presidential election has the greatest impact on Dogecoin and Cardano ADA.

With less than three weeks until the US presidential election, traders are preparing for the situation after November 5 and how the new government will respond to factors affecting the financial markets (including cryptos).

In the past week, cryptos have been on an upward trend, with China's stimulus measures, Western central banks cutting interest rates, and perhaps the US presidential election becoming a more evident focus among recent reasons for the rise.

Although cryptos only became a popular asset in the past (2020) presidential election, the second half of October typically marks the beginning of a call period for financial assets like stocks, hence the recent trend of cryptos may not be uncommon.

In fact, according to the data from Coinglass from 2013 to 2023, the performance of Bitcoin (BTC) shows that the return on investment in the second half of October (16-31) is twice that of the first half of the month (1-15).

(Source: Coinglass)

Impact of the election

Bitwise Asset Management's ETC Group data shows that token prices are uncertain due to the election results.

ETC Group's comparison of implied performance with theoretical value reveals that Bitcoin may increase by 10% in either direction based on the election results. Given the current spot price slightly below $68,000, a 10% increase would mean reaching a new high, exceeding the $73,697 in March. The team also found that the impact of the election may have the greatest effect on Cardano (ADA) and Dogecoin (DOGE), rising by 18% and 20% respectively.

(Source: Bloomberg, Coinmarketcap, ETC Group)

In addition, according to Ycharts data, in presidential election years since 1950, the stock market tends to bottom out in September and/or October, then rebound in November. So far, we have seen this situation in the S&P 500 index and the Nasdaq index, as they have been rising since the beginning of last month.

(Source: Optimisticallie, YCharts)

In addition to the U.S. presidential election, the options market shows a bullish trend towards bitcoin, with the majority of outstanding call contracts at strike prices between $0.07 million and $80,000. The exercise prices expiring on November 29 are $0.141 billion and $120 million nominal value.

According to Deribit's data, the bullish bias towards the call options expiring on December 27 is even more pronounced, with most outstanding call contracts delivering at an exercise price of $0.1 million, with a nominal value exceeding $0.62 billion.

Geoffrey Kendrick, global head of digital assets research at the UK multinational bank Standard Chartered, wrote in a report on Tuesday: 'As the U.S. election approaches, Trump is most likely to be elected, and even from the perspective of digital assets, Harris also looks good, the wider digital asset ecosystem is indeed becoming more likely to go mainstream.'

For bitcoin, this means that the price of bitcoin is very likely to rise to a historical high of $73,000 before the election.