Bitfinex Releases Its 128th Alpha Report
According to the Bitfinex Alpha Report, BTC volatility is accelerating due to geopolitical uncertainty and the strengthening narrative of the "Trump Trade." Election expectations are generating an increase in options activity, and the market is preparing for turbulence. Seasonal trends and rising option interest are heightening optimism for Bitcoin in the latter part of the year.
The 128th Alpha Report published by Bitfinex indicates that BTC volatility is gaining momentum through geopolitical uncertainty and an enhanced "Trump Trade" narrative. A correction of 6.2% occurred before a rebound last week. This pullback has raised expectations that the upcoming U.S. presidential elections, especially a Republican victory, could support bullish sentiment for risk assets like Bitcoin. The correlation between Trump’s election odds and Bitcoin's upward movement is increasing. Anticipation of the election has led to a rise in options activity. Options expiring during the election period are commanding higher premiums, and implied volatility is expected to peak on November 8. This implies that the market is preparing for potential turbulence. Regardless of the election outcome, while long-term price appreciation is deemed trustworthy, short-term volatility is expected to be higher than usual.
The proximity of election uncertainty and the "Trump Trade" narrative is creating an exciting environment for Bitcoin. Bitcoin, which fell to $52,756 in September, has since attracted attention with a 30% increase. Seasonal trends also appear favorable for Bitcoin; in halving years, fourth quarters typically result in bullish outcomes with an average quarterly return of 31.34%. This strong seasonal effect, combined with record open interest in Bitcoin options and futures, is increasing optimism among market participants as the year ends. Another supporting factor for this optimism is the steady increase in call options focused on the $80,000 targets, which expire on December 27. As options drive interest to new highs, the market shows signs of positioning for post-election volatility, potentially pushing Bitcoin toward its all-time high of $73,666. In summary, the convergence of election uncertainty, the "Trump Trade" narrative, and a favorable fourth-quarter period is creating an ideal environment for Bitcoin, promising an exciting phase independent of fluctuating price movements leading up to the election.
In terms of industry developments, Emory University is making a $15.9 million investment in Grayscale Bitcoin Mini Trust and Coinbase (NASDAQ:COIN), contributing to the institutional adoption of digital assets. Microsoft (NASDAQ:MSFT) is set to vote on a proposal to explore Bitcoin as a treasury asset at its upcoming shareholders meeting. Although the board may oppose this due to volatility and regulatory risks, even a small allocation of BTC from their $76 billion reserves could significantly impact the legitimacy of cryptocurrency as an institutional asset.