Nov. 4, 2024

CoinDesk 20 Index: 2,008.80  +0.39%
Bitcoin (BTC): $68,897.73  +0.86%
Ether (ETH): $2,473.42  +0.81% 
S&P 500: 5,728.80  +0.41%
Gold: $2,742.19  +0.38%
Nikkei 225: 38,053.67  -2.63%

Bitcoin and other major cryptos traded little changed on the final day before the U.S. presidential election. BTC edged back toward $69,000, around 0.8% higher in the last 24 hours. The broader digital asset market was more muted, rising less than 0.5%. From being a few dollars away from a new record last week, bitcoin pulled back to a low of $67,600 on Sunday, seemingly in tandem with a retreat in the more pro-crypto Donald Trump's chances of election victory. With only hours remaining before the first polls open in some eastern states, it seems traders are sitting on their hands until they have a clearer picture of where this one is headed.

Perceived winning odds of Democrat Kamala Harris continue to rise on betting platform Polymarket, with users buying and selling hundreds of thousands of favored shares in a bump for market activity. Shares of Harris winning the election surged to 43 cents ahead of Tuesday’s vote, up from 33 cents on Oct. 30. Republican Donald Trump’s shares fell, dropping from 66 cents to 57 cents. Meanwhile, polling aggregator Real Clear Polling gives Trump a microscopic edge at 48.5%-48.4%. The increase in Harris' odds might be due to traders hedging their bets, according to a CoinDesk analysis, with a study of trades above $10,000 suggesting both large bets on Harris and strategic trading to protect against a Trump loss.

Singapore's central bank said it will introduce new measures to advance tokenization in financial services. The Monetary Authority of Singapore (MAS) wishes to form commercial networks to deepen liquidity of tokenized assets, develop an ecosystem of market infrastructures, foster industry frameworks for tokenized asset implementation and enable access to common settlement facilities for tokenized assets. "We are encouraged by the keen participation from financial institutions and fellow policymakers to co-create industry standards and risk management frameworks to facilitate commercial deployment of tokenized capital markets products, and scale tokenized markets on an industry wide basis,” Leong Sing Chiong, deputy managing director for markets and development, said.

Bitcoin could be set for a swing of $6,000-$8,000 following the election, according to Greg Magadini, director of derivatives at Amberdata. 

The projection is based on the annualized forward volatility of 112% derived from the Nov. 6 options trading on Deribit, which suggests a price fluctuation of $4,000 in either direction. A positive 1.5-sigma of that translates to a price swing in the range of $6,000 to $8,000. 

"I expect a +1.5-Sigma ($6,000 to $8,000 price range) as a result of the post-election price reaction," Magadini told CoinDesk. 

Magadini assumes 1.5-sigma volatility because the latest reports show a tight race in seven swing states.

The 50-50 odds indicate that an outcome is unlikely to surprise markets, irrespective of who wins, implying a low probability of a positive 3-sigma move (three standard deviations from the mean in a normal distribution). A positive 3-sigma move indicates an extreme event.

Similarly, a subnegative 1-sigma move or minimal price action looks doubtful, as 50-50 odds mean traders won't be able to price the election outcome in advance.

- Omkar Godbole