The Bitcoin market remains stable in silence ahead of the presidential election

- Bitcoin Market Experiences Less Than 5% Volatility for 34 Consecutive Days - Uncertainty in the Presidential Election Between Donald Trump and Kamala Harris, and Oversupply in the Options Market [Unblock Media] The current Bitcoin market is relatively calm just before the US presidential election. Bitcoin has been showing price fluctuations of less than 5% for 34 consecutive days as investors await the election results. This is one of the longest periods of stability in the past year. Traditionally, Bitcoin has shown strong performance in October, only declining twice in the past decade with an average increase of around 20%. This phenomenon is well-known as "Uptober." However, this October has been exceptionally quiet. The reason for this stagnation is the uncertainty surrounding the election results. Republican candidate Donald Trump is known as a fervent supporter of the cryptocurrency industry and has been involved in decentralized finance through the World Liberty Financial project, which aims to minimize central authority intervention and allow individuals to freely utilize the financial system. On the other hand, Vice President Kamala Harris’s stance on cryptocurrency is unclear. Harris is likely to maintain the traditional Democratic Party position but has yet to announce specific policies. The market is feeling uncertain about what position Harris will take while the Biden administration continues to crack down on the cryptocurrency industry. The US Securities and Exchange Commission (SEC) recently filed a complaint against Chicago-based trading giant DRW Holdings LLC’s cryptocurrency division, Cumberland DRW, for operating as an unregistered securities dealer handling over $2 billion in digital assets. Cumberland was accused of trading a significant quantity of digital assets without appropriate licenses. This punishment highlights the need for strict regulation in the cryptocurrency market, in line with previous measures taken against firms like Binance and Coinbase. Hashnote CEO Leo Mizuhara mentioned, "We are waiting for significant movements post-election." Many expect Trump’s re-election to be positive for Bitcoin. Meanwhile, there are mixed expectations that Harris might follow the existing Democratic policies or be favorable to cryptocurrency and technology. In the options market, many traders expect high volatility leading up to the election. Jahir Eptika, founder of Split Capital, commented, "Most cryptocurrency investors are waiting to trade until spot transactions become available," adding that recent regulatory actions and some of Trump’s crypto-friendly policies could have a significant impact. The attractiveness of spot cryptocurrency trading relative to other asset classes and the oversupply in the options market are pushing for reduced volatility. The oversupply in the options market refers to a situation where investors sell many options contracts, causing dealers to hold multiple contracts as inventory for a long time. This puts pressure on dealers to reduce their portfolios, narrowing the price gap with the spot market, thereby suppressing price volatility. Shuyang Tang, president of Arbelos Market, analyzed that “the oversupply in the options market has led dealers to hold inventory for a long time, thus curbing volatility,” and that “this, combined with election and macro-market uncertainties, and the shifting focus to the Chinese stock market and traditional markets, has led to the cryptocurrency market’s recent slump.” For reference, 'volatility' refers to the extent of asset price fluctuation, with high volatility indicating unexpected price movement risks. 'Spot trading' refers to immediate transactions, whereas the options market trades the right to buy or sell assets at a specific future date. Spencer Harlan, global head of OTC trading at GSR, also predicted that volatility would continue to decrease as Bitcoin adoption increases with the introduction of Bitcoin ETF options by BlackRock. He said, "It is reasonable for realized volatility to decrease as Bitcoin matures as an asset class," attributing this to institutional investors pursuing long-term, stable investment strategies. These institutional investors maintain large, consistent capital flows, reducing the price fluctuations of notable assets. Additionally, easy access through investment vehicles like ETFs promotes Bitcoin's price stability. Overall, the combination of election uncertainty and structural factors in the options market has led to a calm state in the current Bitcoin market.