Institutional Investors Position for Bitcoin Volatility Into the U.S. Election

As a seasoned market observer with over a decade of experience under my belt, I can confidently say that the upcoming U.S. elections are poised to bring about a significant wave of volatility in the cryptocurrency markets, particularly bitcoin (BTC). The recent surge in call option buying on CME bitcoin futures and rising borrowing rates in crypto credit markets are clear indications of this trend.

The upcoming U.S. elections could cause a surge of volatility in Bitcoin prices, and major financial institutions are getting ready for this possibility based on expert predictions.

Institutional crypto loan rates are climbing in anticipation of the November 5th presidential election, as stated by Sidney Powell, a co-founder at Maple Finance, during a conversation with CoinDesk.

Powell stated that a rise in loan requests from bigger financial institutions is being observed by us. The need for higher value loans as well as borrowing based on existing trade credits has noticeably surged, he added.

Powell noted that these players expect there could be an increase or rise in the value of assets, along with potential market fluctuations on the positive side.

Such institutions are often composed of prime brokerage companies and over-the-counter desks. These entities often accumulate stockpiles to offer margin services to their clients and counterparts, or they prepare to buy more with borrowed capital in anticipation of an upward market trend, as he clarified.

The stance in derivative markets seems to indicate that institutions are investing in cryptocurrencies prior to the upcoming elections.

As a seasoned crypto investor, I’ve noticed that the Chicago Mercantile Exchange (CME) bitcoin futures market, a preferred platform for established institutional players, has been particularly bustling lately. According to Joshua Lim, co-founder of principal crypto broker Arbelos Markets, these recent days have seen some of the busiest activity in this market.

There’s been an enormous increase in the purchase of Call Options for CME related to the election, even surpassing some of the biggest transactions ever recorded on the exchange, according to what Lim shared with CoinDesk via Telegram.

Approximately $350 million worth of Bitcoin November call options have been traded during the past week, with a potential profit point set around $79,300 by the end of November expiration. This suggests that these traders expect Bitcoin’s price to increase in the coming month.

Lim stated, “We’re very optimistic about the upcoming election, and it appears that cryptocurrency investment funds are expanding as the market becomes more established.