Stock Market Weakness May Trigger Capital Shift To Crypto Market, Says QCP Capital
In Brief
QCP Capital notes differing volatility expectations between crypto and stock markets in its latest analysis, as the US election draws near.
Singapore-based cryptocurrency trading firm QCP Capital published a new market analysis, noting divergent volatility expectations between the cryptocurrency and stock markets as the US election approaches. According to the analysis, short-term implied volatility for Bitcoin is anticipated to peak on election day, with options expiring at that time showing volatility 10 points higher than the previous expiration date. Additionally, call option premiums are higher than put option premiums, even though Bitcoin’s price remains around 8% below its all-time high.
Meanwhile, the S&P 500 index has reached record levels, with 20% of companies set to report earnings. The options market is leaning toward put protection, anticipating a possible 1.8% movement in the index on November 6th, the day after the election. Furthermore, the correlation between stock and cryptocurrency markets is also notably high at 0.83, which the firm suggests could be a signal of potential change due to the typical reversion to the mean and the contrasting positions in the options markets.
QCP’s analysis highlights that the election represents a zero-sum scenario for equities, with sector winners depending on the result. However, both presidential candidates are seen as more favorable toward cryptocurrencies than the previous administration, so any weakness in the stock market could lead to capital flowing into the cryptocurrency market.
Bitcoin Trades Near $67,000 Mark, Despite $294M Inflows Into ETFs
As of the current writing, Bitcoin is trading at $67,122, reflecting a 1.75% decline in the last 24 hours. During this period, the cryptocurrency’s intraday low reached $66,677, while its high touched $68,394. Interestingly, this decline contrasts sharply with recent inflows into Bitcoin exchange-traded funds (ETFs), which saw $294.29 million in new investments as of October 21st, according to SoSoValue data.
At the same time, the global cryptocurrency market cap fell by 2.16% over the past day, settling at $2.32 trillion. However, the total cryptocurrency market volume remained strong, increasing by 11.36% and reaching $83.73 billion, as reported by CoinMarketCap.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
