Top shelf

US Election outcome still holds uncertainty as market volatility increases. Bitcoin enjoys end of year highs while the world gets tired of US Elections 2020.

How High?
Tezos introduced superbaking this week, as the network battles to stay relevant in the era of DeFi and PoS. The feature is an improvement to the already existing baking mechanism (XTZ's version of mining/staking). It is aimed at holders that can commit a wallet with a minimum XTZ balance that is dynamically determined by an integrated algorithm and offers special compensation for the first 1500 users to take the plunge. Those of you interested in qualifying among those first 1500 should stay updated.

Privacy preservation
Wasabi Wallet is looking to overhaul its privacy-focused bitcoin software wallet with user-centric design and privacy improvements including automatic, default CoinJoins. (A CoinJoin is a method of mixing BTC transactions from multiple users to better conceal identities). Separately, Blockstream engineers will roll out improvements to bitcoin multi-signature transactions, with privacy benefits. The “MuSig2” design builds on previous multi-signature schemes – a way to authorize transactions using more than one private key – while reducing the technical complexity and amount of communication between parties to operate.

CoinDesk's upcoming virtual event Bitcoin for Advisors, on two half days Nov. 9-10, aims to equip investment advisors with tools to better understand bitcoin, talk to their clients about it and work it into their business.

In close cooperation with professional advisors, CoinDesk is showcasing a program tailored to the financial advisor community. Through a series of keynotes, panels and interactive roundtable sessions, we will discuss investment theses for bitcoin, why younger demographics are turning to this asset and how it fits into the current global macroeconomic picture.

We will also walk through the practicalities: how to answer client questions about bitcoin, how to talk to your compliance department about bitcoin, how can bitcoin can help grow your book. Apply for Bitcoin for Advisors, Nov. 9-10.

Bitcoin’s stimulus
Bitcoin crossed $15,000, the first time since January 2018. The cryptocurrency is now up 7.8% over the past 24 hours and over 108% on a year-to-date basis, with little sign of slowing. CoinDesk’s Omkar Godbole notes this recent rally is represents a ~40% climb in the last four weeks alone. Buoyed by an imminent sense of monetary stimulus, indeterminate of who wins the U.S. presidential election, analysts predict this rise to continue. "We may not know what a post-election [fiscal] stimulus may look like, but investors continue to believe that the [Federal Reserve] will keep printing money at a pace that favors bitcoins finite supply," John Kramer, a trader at crypto liquidity provider GSR, told CoinDesk.

Anyone's bet

Prediction markets are still buzzing with activity amid the uncertainty of the current U.S. presidential election process. Yesterday, decentralized predictions platform Polymarket became the fourth-highest fee-generating blockchain project, according to Cryptofees, only behind Bitcoin, Ethereum and DeFi protocol Uniswap.

Currently, perhaps obviously, the largest pool on Polymarket is “Will Trump win the 2020 U.S. presidential election?,” with nearly $8.8 million in trading volume. While predictions flipped in President Donald Trump’s favor on the first night of ballot counting, most bettors now see former Vice President Joseph Biden as favored to win.

“I think us being top 4 of fee-generating blockchain apps, literally anything blockchain-related, is insanity,” Shayne Coplan, Polymarket CEO, told CoinDesk’s Sebastian Sinclair. “Just in this election cycle alone, we have seen our volume surpass $10 million which is a lot higher than we expected in such a short time frame.”

Of course, prediction markets are not the only way for people to take bets out on election results. It’s likely most markets are, in some way, processing the current moment of anxiety and uncertainty.

For instance, trading in Chicago Mercantile Exchange (CME) bitcoin futures during the U.S. election has spiked 75% above the 2020 average. The CME is routinely one of the largest, and most institutionally-driven crypto options exchanges. Average daily open positions, which allow traders the option to buy bitcoin between a specified period, was up 20% in just the first two days in November compared to October.

Making sense of bitcoin’s current three-year high, Bill Noble, chief technical analyst at Token Metrics, said that no matter the electoral outcome, monetary stimulus is to be expected. This strengthens one of bitcoin’s core narratives (the things people believe about the oldest cryptocurrency) as a hedge against inflation.

“If there is social disorder because of a Trump win, the Fed prints. If the election result is a blue wave and taxes rise, the dollar falls because the Fed prints more, and more and more," Noble said.

Going back to predictions markets: Anthony Sassano wrote, “I’ve long thought that one of the major reasons prediction markets hadn’t taken off yet was due to little to no interesting markets being available to bet on.”

That’s not to say predictions markets are any better or worse than traditional ways of measuring risk. Cami Russo’s The Defiant publication said Ethereum prediction markets are the “best or worst answer” to uncertainty, while Decrypt found FTX’s platform largely mirrors FiveThirtyEight's model.

With election headlines currently dominating the discourse, the stakes are high and the bets are on.