QCP Capital: Weakness in the stock market could prompt a shift in funds to the cryptocurrency market

BlockBeats news, on October 22, QCP Capital's latest analysis pointed out that as the US election day approaches, the cryptocurrency and stock markets show different volatility expectations. Data shows that Bitcoin's short-term implied volatility peaked on options expiring on election day, 10 volatility points higher than the previous expiration date, and the premium of call options is higher than that of put options, although the current price of Bitcoin is still about 8% below its historical high.

At the same time, the S&P 500 index is at a historical high, and about 20% of its constituent companies are about to release financial reports. The options market is biased towards bearish protection, and it is expected that the index may fluctuate by 1.8% one day after the election (November 6). The correlation between stocks and cryptocurrency markets has reached an all-time high of 0.83. Considering its mean reversion trend and different options market positioning, this may indicate the arrival of a market inflection point.

QCP analysis points out that the election constitutes a zero-sum game for the stock market, and the performance of different industries depends on the election results. In contrast, both candidates are more friendly to cryptocurrencies than the previous administration, so if the stock market is weak, it may prompt funds to shift to the cryptocurrency market.