Why Are Bitcoin and Altcoin Prices Lackluster? Experts Share Their Reasons and Expectations

Investors await the outcome of the upcoming US presidential election Bitcoin (BTC) entered an unusually quiet period.

According to data from Bloomberg, the BTC price fluctuated below 5% for 34 consecutive sessions, the longest period of such stability in a year. This period of recession has disappointed many in the crypto community, as October has historically been a strong month for Bitcoin, earning it the nickname “Uptober.”

According to Bloomberg data, over the past decade Bitcoin has only lost twice in October, gaining an average of more than 20% for the month, compared to an average gain of 6% in all other months.

Analysts attribute the current calm to the lack of clear market catalysts, with attention primarily focused on the upcoming US presidential election. Republican candidate Donald Trump, an ardent supporter of cryptocurrencies, has launched his own decentralized finance project, World Liberty Financial. In contrast, the stance of his opponent, Vice President Kamala Harris, remains unclear. The Biden administration has maintained a tough regulatory approach towards the crypto sector.

On Thursday, the U.S. Securities and Exchange Commission (SEC) charged Cumberland DRW, the crypto division of Chicago-based trading firm DRW Holdings LLC, with operating as an unregistered securities dealer containing over $2 billion in digital assets. This action follows a series of SEC sanctions against major crypto companies, including Binance and Coinbase.

“We are waiting for the elections for the next big move,” said Leo Mizuhara, CEO and founder of crypto asset manager Hashnote. “Many people think that Trump’s presidency will be positive for Bitcoin. Kamala’s situation is a little more uncertain; “While some believe it will follow the Democrats’ hostile tone, others hope it will be more crypto- and tech-friendly than its predecessor.”

According to Zaheer Ebtikar, founder of crypto fund Split Capital, traders in the options market are positioning themselves for higher volatility as the election approaches. “Most people in crypto are waiting to trade until there is some sort of spot action,” Ebtikar said. “After seeing the SEC’s actions against Cumberland and other firms, many believe a Trump administration would further support the industry.”

Additionally, oversupply in the options market and increased interest in other asset classes have made alternatives to spot crypto trading more attractive. “There has been too much supply in the options market, causing sellers to hold onto their holdings and suppressing volatility,” said Shiliang Tang, president of trading firm Arbelos Markets. “This, combined with uncertainty regarding the election and macroeconomic conditions, has led to a lackluster sentiment in crypto markets.” It led to performance.”

Spencer Hallarn, head of global over-the-counter trading at crypto investment firm GSR, noted that volatility may continue to decline with the upcoming launch of options on BlackRock’s Bitcoin ETF and increasing adoption of Bitcoin. “As Bitcoin matures as an asset class, it is reasonable to expect realized volatility to decrease,” he commented.

*This is not investment advice.