CoinDesk
Bitcoin options expiring Nov. 4 carry implied volatility of about 43.5%, above roughly 36% for later expiries, as traders prepare for the U.S. midterm elections. The curve bulges around the event, then settles near 36% by late November. Ether options show a similar pattern.
Why it matters
The options premium suggests traders expect a short burst of price movement as election results emerge, rather than prolonged turbulence. Futures open interest remained largely steady over the past 24 hours, at $58 billion for Bitcoin and $23.58 billion for Ether, pointing to protection being added to existing positions rather than a wave of new futures bets.
Laevitas described the setup as hedging demand layered onto existing risk. The five-point skew means puts, which offer downside protection, are more expensive than calls. The firm said this type of event-driven demand often fades after the catalyst passes, which could flatten the volatility bulge after election day.
Market impact
Bitcoin and Ether had recovered above Friday's lows of about $78,000 and $2,290, respectively, after a Binance hack triggered market panic. Galaxy's Alex Thorn highlighted Bitcoin's close above its 50-week moving average for a seventh consecutive week, despite the hack.
Other signals are mixed. Bitcoin's median November gain since 2013 is about 8.8%, excluding the 2013 outlier, and both Bitcoin and the S&P 500 have historically gained after U.S. midterm elections. But spot Bitcoin ETFs recorded about $643 million in outflows on Friday, their largest since June. Traders will be watching whether election-related hedging recedes after Nov. 4 and whether ETF outflows continue.
Frequently asked questions
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How much higher is Bitcoin's implied volatility for Nov. 4?
Bitcoin options expiring Nov. 4 carry implied volatility of about 43.5%, compared with roughly 36% for later expiries.
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What does steady futures open interest suggest about trader positioning?
Open interest held largely steady at $58 billion for Bitcoin and $23.58 billion for Ether. The report interprets this as traders adding options protection to existing positions rather than making fresh futures bets.
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What does the five-point options skew indicate?
Puts are more expensive than calls, indicating stronger demand for downside protection.
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How large were Friday's spot Bitcoin ETF outflows?
Spot Bitcoin ETFs recorded about $643 million in outflows on Friday, the largest outflow since June.
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What historical November and election trends are cited for Bitcoin?
Bitcoin's median November gain since 2013 is about 8.8%, excluding the 2013 outlier. Bitcoin and the S&P 500 have also historically gained after U.S. midterm elections.
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