QCP Capital: It is expected that the BTC Fluctuation on election night will be about 3.5%, and the market may underestimate the risk after the election.

PANews reported on November 5th that QCP Capital, a Singaporean encryption investment firm, stated that as the most tightly contested presidential election in US history is about to unfold in the stock, bond, and cryptocurrency markets, the market’s anxiety is becoming more evident. The ‘Trump trade’ (i.e. betting on a strong US dollar, cryptocurrency pump, and rising bond yields) is gradually heating up on the eve of the election, thanks to Trump’s leading position in the prediction market. However, if Harris ultimately wins, these gains could be quickly wiped out, leading to dramatic fluctuations in the market overnight. The cryptocurrency market is currently expecting the BTC spot price to fluctuate by around 3.5% on election night. However, traders may underestimate the post-election risks: the lack of a premium on the fluctuation rate after November 8th indicates that the market expects a quick outcome of the election, but may underestimate the impact of potential latency or controversial results. The outcome of the congressional elections is equally important and may even have the same impact as the outcome of the presidential elections. If the Republican Party wins big, it could mean higher future fiscal deficits, prompting the Federal Reserve to adopt a more hawkish stance - undoubtedly unfavorable for risk assets. Conversely, if there is a split in the legislature, the market may be more stable and volatility may gradually decrease. Currently, the Options market shows a balance between call Options and put Options. In the past few days, there has been a significant amount of buying activity for both call Options and put Options. However, BTC is still seen as part of the ‘Trump Trade’. On Monday, as a large amount of funds flowed out of the BTC Spot ETF, the BTC Spot price dropped, which aligns with the results of a poll showing Harris with a slight lead in Iowa. With the gradual release of the election results tomorrow, it is expected that there will be significant fluctuations in the BTC Spot price.