Trump’s victory may give crypto a ‘dopamine hit’, but traders should be careful
Many crypto industry experts have predicted that Donald Trump's victory in the US presidential election on November 5 could trigger a major crypto market rally.
Still, some analysts warn that crypto investors should be careful in the days and weeks surrounding the election, because other factors may be at play.
Pav Hundal, lead analyst at Swyftx, told Cointelegraph that Trump's victory could be a dopamine hit, warning that markets will be more volatile in the days surrounding the election.
What should traders expect after the election? Analysts say it is up in the air
According to Nick Forster, founder of Deriv, “traders should approach with caution” because the market is currently pricing in high volatility. “There may be a better situation, but the risks are the same,” he warned.
Referring to the derivative options data, Forster traders are preparing for high price movements around the election day.
“Increased call buying indicates that some traders are betting on false results, which can lead to a ‘buy the rumor' situation, but the reality can quickly lead to ‘selling the news' like the real election results.”
Since October 23, Bitcoin (BTC) has increased by 7.62%, reaching $72,432 at press time – 2% away from its all-time high in March.
Bitcoin is trading at $72,432 at the time of publication. Source: TradingView
Still, Hundel doesn't see the election results as “a decisive factor in Bitcoin hitting $100,000.”
10T Holdings founder Dan Tapiro made a similar comment, saying that regardless of which candidate wins the election, the property is set to hit six figures.
“Barring some kind of external shock, we're looking at six-figure bitcoin prices before the end of the year. Regardless of who controls the White House.
A ‘diversified strategy' might be better, says the analyst
Traders should expect to “buy the news, sell the rumor” if Trump wins the election, or remain uncertain if Trump wins the election, according to Forster.
Related: Trump wins, ‘regulatory sanity' is bad news for memecoins: Prof
Forster said traders with the ability to implement a “diversified strategy” including hedging options would do better than “outright buying”, especially given the market's “high exposure” to domestic and international news.
Meanwhile, Handal is not overly concerned about traders timing their trades, unless they are highly experienced, as he remains confident of higher growth heading into 2025.
“Unless you're a sophisticated investor looking for short-term arbitrage opportunities on the outcome of the US election, I'm not sure it's very important for your business to invest time in this area,” Hundel said.
“The market may be swayed by the outcome of the US election. But the underlying market fundamentals point to growth,” he added.
Handel's comments line up with FalconX head of research David Lunt, who said Bitcoin “could perform well regardless of the election results” in an October 21 market report.
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This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
