QCP Capital Warns: Crypto Faces Threats from Stock Market Volatility!
Key points:
- QCP Capital reveals that stock market volatility momentum is driven by traders using leverage and a significant $1.15 trillion corporate buyback this year.
- Bitcoin’s volatility is higher around the US election, with a 6-point difference between options expiring before and after.
QCP Capital tentatively tries to explain the dynamics behind the recent stock market volatility recovery and how those dynamics will affect the crypto market.
Stock Market Rebound Driven by Leverage and Buybacks
Newfound activity is returning to the stock market, as QCP Capital explains, which discusses that momentum traders and trend followers are starting to leverage again, thus elevating it right now and creating more considerable gyrations and increased stock market volatility in August as liquidity remains low.
Moreover, corporate stock buybacks are growing to $1.15 trillion this year. Goldman Sachs’ trading department also reported record client interest in purchasing stocks when the price drops.
Read more: QCP Capital Predicts BTC to Hit 74K, Expects ETH to Outperform with New ETF!
US Election Risks and Their Influence on Bitcoin
If any or all of these developments continue, there will likely be sweeping consequences for the crypto market. Firstly, if investors are more appetitive about risk, this will spill over to cryptocurrencies and gold. In the case of Bitcoin, this may continue to rise because call options are showing strong demand—again signalling investors’ optimism.
The US election is another critical stock market volatility driver. According to Macroaxis, Bitcoin’s skewness data shows more significant activity in put options as one approaches the election, meaning that investors have become more cautious. The difference in volatility in options that expire before and after the election is 6% points. The Democratic Party’s platform lacks support for cryptocurrencies, in contrast to the Republican Party’s promise to eliminate suppression of “illegal and non-US cryptocurrencies.”
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |