Bitcoin options markets are pricing in a short burst of volatility around the U.S. midterm elections, while traders appear less convinced that the event will trigger a longer period of market stress. According to CoinDesk, the term structure of implied volatility in bitcoin options shows a clear bump at the Nov. 4 expiry, where IV stands near 43.5%, compared with roughly 36% for contracts expiring later. That pattern suggests the market is assigning a premium to the period immediately after election day, when early vote counts and media projections could move prices.
Ether options are showing a similar shape, with implied volatility expected to ease back to around 36% by late November. At the same time, open interest in bitcoin and ether futures was broadly steady over the past 24 hours at about $58 billion and $23.58 billion, respectively. The positioning points to traders using options to hedge existing exposure rather than adding fresh futures bets. Laevitas said demand for downside protection could fade quickly once the election event passes, which could flatten the current bump in the IV curve. Bitcoin and ether were trading above $78,000 and $2,290 after rebounding from lows seen following Friday’s attack on Binance, while U.S. spot bitcoin ETFs recorded about $643 million in net outflows on Friday, the largest one-day outflow since June.
Traders in crypto markets expect the U.S. midterm elections to trigger short-term volatility, but they do not appear to be pricing in a lasting period of disruption.
Options markets are pricing a post-election volatility spike
According to CoinDesk, the term structure of implied volatility, or IV, in bitcoin options shows that contracts expiring on Nov. 4 carry IV of about 43.5%, well above the roughly 36% level seen in later-dated contracts. The shape suggests the market is assigning extra premium to the period immediately after election day, when early vote results and media projections could drive price swings.
Ether options are showing a similar pattern. Its IV curve is expected to fall back to around 36% in late November.
Futures open interest stayed broadly flat
At the same time, open interest in bitcoin and ether futures was largely unchanged over the past 24 hours, standing at about $58 billion and $23.58 billion, respectively. That points to traders favoring options as a hedge for existing positions instead of putting on new futures bets.
Laevitas said demand for downside protection could fade quickly after the election event passes, and the bump in the IV curve could disappear with it.
Spot prices rebound, ETF outflows remain in focus
In the spot market, bitcoin and ether were trading above $78,000 and $2,290, respectively, after rebounding from lows hit following Friday’s attack on Binance.
Galaxy Head of Research Alex Thorn said bitcoin has now closed above its 50-week moving average for a seventh straight week, a sign of resilience.
Still, U.S. spot bitcoin ETFs posted about $643 million in net outflows on Friday, the largest one-day net outflow since June, and that remains a point to watch.
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