How high can BTC go after the US election?

summary

• Over the past decade, Bitcoin’s average return in the second half of October was twice that of the first half.

• The options market showed a bullish bias for November and December expiration dates.

• The US election had the biggest impact on Dogecoin and Cardano ADA.

With less than three weeks until the U.S. presidential election, traders are preparing for what happens after Nov. 5 and how the new administration will respond to factors affecting financial markets, including cryptocurrencies.

Cryptocurrencies have been on an upward trend over the past week, with Chinese stimulus measures, interest rate cuts by Western central banks, and perhaps the US election coming into clearer focus as reasons for the recent rise.

While cryptocurrencies only really became popular assets during this past (2020) presidential election, the second half of October typically marks the beginning of a bullish period for financial assets like stocks, so cryptocurrencies’ recent moves may not be unusual.

In fact, according to Coinglass data from 2013 to 2023, Bitcoin (BTC) performance shows that the returns in the second half of October (16-31) are twice as high as those in the first half (1-15).

(Source: Coinglass)

Election Impact

Data from Bitwise Asset Management’s ETC Group shows that token prices are subject to uncertainty over the election results.

Using implied performance versus theoretical values, ETC Group found that Bitcoin could rise 10% in either direction depending on the election results. Given that the current spot price is just under $68,000, a 10% rise would mean a new high, surpassing March's $73,697. The team also found that the impact of the election could have the greatest impact on Cardano (ADA) and Dogecoin (DOGE), with gains of 18% and 20%, respectively.

(Source: Bloomberg, Coinmarketcap, ETC Group)

Additionally, data from Ycharts shows that in presidential election years since 1950, stocks tend to bottom in September and/or October before rebounding in November. So far, this is what we've seen in the S&P 500 and Nasdaq, which have both risen since the beginning of last month.

(Source: Optimisticallie, YCharts)

Aside from the US election, the options market shows a bullish bias for Bitcoin, with the majority of bullish open interest at strike prices of $70,000 and $80,000. The strike prices for November 29 expiration are $141 million and $120 million notional value, respectively.

According to Deribit data, the bullish bias is more pronounced for the December 27 expiration, with the majority of open interest in call options being delivered at the $100,000 strike price, with a notional value of more than $620 million.

“As we approach the U.S. election, with Trump the most likely candidate and Harris looking good even from a digital asset perspective, the broader digital asset ecosystem does look increasingly likely to go mainstream,” Geoffrey Kendrick, global head of digital asset research at British multinational bank Standard Chartered, wrote in a note Tuesday.

“For BTC, this means that Bitcoin could very well rise to its all-time high of $73,000 before the election.”