First Mover: Bitcoins Hit Exchanges as Bloomberg Touts Crypto and DeFi Hedge Fund Seeks $50M

The upcoming U.S. presidential election has become one of the most contentious in history, fraught with searing divisions over everything from the economy to race to the continued health of democracy itself.

So it’s not surprising that Wall Street options traders are now pricing in expectations of elevated market volatility around the November election. Analysts for the investment banking giant Goldman Sachs noted earlier this month that price swings of nearly 3% are implied around election day in the Standard & Poor’s 500 Index of U.S. stocks.

What’s surprising is that options trading on notoriously volatile bitcoin prices, which often trade in sync with stocks, implies a stretch of uncanny calm come November, CoinDesk’s Omkar Godbole reported Tuesday.

Godbole writes that ample technical factors might explain the discrepancy, from the influence of certain hedging strategies to the reality that the nascent bitcoin-options market is still quite small in relative terms, with most action concentrated in “front-month” contracts that expire in September.

Another possibility, according to Godbole, is that bitcoin, as a globally traded asset, might actually be less susceptible to the U.S. outcome, even though the cryptocurrency is priced in dollars. The implication could be that bitcoin decouples at that point from the U.S. market.

“The U.S. elections will have relatively less impact on bitcoin compared to the U.S. equities,” Richard Rosenblum, head of trading at the digital-asset firm GSR, told Godbole.

btc-atm-implied-vols-2
Bitcoin’s expected volatility over the next few months, as implied by the options market, has been falling.
Source: Skew.

Crypto investment firm Panxora seeks $50M for new hedge fund to buy DeFi tokens

There’s been a months-long string of astonishing developments and ridiculous twists in the fast growing arena of decentralized finance, or DeFi. Digital tokens with names like YAM and SUSHI have appeared overnight, exploding in…

Read More