QCP Tips High Convexity Trades in Bitcoin Ahead of US Elections

Highlights

• QCP Capital has tipped high convexity trades as bulls tighten their grip on the markets.
• Donald Trump and Kamala Harris’ move toward pro-crypto policies could ignite wider gains. 
• Other macroeconomic factors like policy rate cuts have attracted traditional investors.

QCP Capital has pointed to increased sentiments in the crypto market on the back of several positive developments. The firm-tipped convexity trades in line with the Uptober drive could usually seen in the latter half of the month. Bitcoin price has soared above $65,000 as bullish momentum soars.

QCP Cites Macro Factors

In a recent market release, QCP explained that the uptrend in the crypto market is due to factors in the United States market. The run-up to the November polls has sparked a bull phase for the market as both candidates have turned pro-crypto. This is in contrast to the present administration and the Securities and Exchange Commission’s regulatory by-enforcement strategy. 

Asia Colour – 15 Oct 24

1/ #BTC has surged another 2.4%, hitting 66.5k before settling around 65k, driven by spot demand and election optimism.

— QCP (@QCPgroup) October 15, 2024

As Bitcoin grew to a main election issue, most market participants projected growth as previous hurdles would become fazed out. In the last couple of years, the SEC filed lawsuits against crypto firms and executives lowering market sentiment. This also led to US executives bemoaning talent migration out of the country. 

Trump and Biden Moved Pro-Crypto

According to QCP, the rally might be an election sparked initially by Donald Trump’s lead in the polls. Donald Trump has become popularly pro-crypto ahead of the election rolling out plans for the sector. The Republican candidate also launched a decentralized finance (DeFi) platform as well as a m non-fungible token (NFT) collection. 

QCP stated:

“Trump both increasingly viewed as pro-crypto, the election could be positive for the market regardless of the outcome. The absence of major inflation or labor data in the near term presents an opportunity for crypto to rise with lower risk premiums. This outlook is further supported by the Bitcoin spot ETF, which recorded a net inflow of $555 million on Monday—the largest since June 4th.”

Delay in Mt Gox Payments

Aside from the United States elections, macroeconomic factors have tilted sentiments to the bullish zone. Global policy rate cuts in many jurisdictions led to more funds in risky assets. As a result, Bitcoin and altcoins notched inflows with many tipping Q1 2024 inflows. The delay in Mt Gox repayment preventing a supply overhang also accounts for increased demand. 

This year, the asset price dropped with the news of Mt Gox repayments after a decade. Concerns were linked to most creditors who might sell their assets causing a sell pressure. Furthermore, QCP analysts wrote that reduced geopolitical risk in the Middle East could also help the status quo.