The ongoing surge in the stock market driven by momentum traders and significant corporate buybacks pushing up values has sparked speculation about the possibility of this sentiment spreading to alternative investments, like cryptocurrencies or gold, once more.
Given that Bitcoin (BTC) is changing hands at nearly $60,800, the renewed interest in equities could provide timely support for crypto buyers anticipating a move higher. The options market will continue to have demand for topside calls, with room for higher profits for crypto investors.
On Crypto and Gold Markets
Equities have surged as traders add more risk with lower liquidity in place, typically as seen in August. As companies buy back their shares at a record pace, investors are growing confident, creating waves across markets. This risk appetite is likely to extend to so-called ‘alternative assets’ such as cryptocurrencies and gold, which are used when the market stirs back into business.
QCP also highlighted the robust demand for topside calls on Bitcoin, which can also push its price higher. Investors are gravitating toward these other choices as they search for opportunities to profit from the equities market rally that refuses to die off.
The bullish sentiment could indeed spill over to Bitcoin and gold as traders and investors look for ways to diversify portfolios, especially in the face of an oncoming Fed rate cut.
Impact of U.S. Elections on Bitcoin
Elections in the U.S., set to be held next month, further complicate Bitcoin’s future. Political tension is one of the main reasons for market volatility, which will intensify ahead of impending elections. At present, Bitcoin options show a skew, as investors are now looking to hedge any exposure they might have going into Tuesday.
Volatility from options still significantly impacts the market, especially as U.S. elections are approaching. Currently, the crypto market is hanging its head in anticipation of how much it can change depending on who wins.
While Democrats have not publicly shown enthusiasm for the crypto market, this is a stark contrast to the Republicans, who vowed to stop what they called ‘the unlawful and un-American crypto crackdown.’ Depending on the outcome of the election, this political division can severely impact Bitcoin’s price.
The prevailing risk-on nature of equities at present will provide some tailwind to both Bitcoin and gold prices. Still, elections lie ahead in what is clearly a major existential threat that investors can hardly shrug off.
Political uncertainty is meanwhile reflected in the Bitcoin options market, with a notable uptick in demand for protective puts as well. In the run-up to the election, these opposing forces of bullish equities momentum and caution over an impending contentious U.S. presidential election are likely to determine Bitcoin’s price direction in the coming months.