Trading Bitcoin Options Around Election Scenarios

Summary

The article considers how possible 2020 US election outcomes might affect Bitcoin and its options. It argues that political effects on US stocks may not carry over directly to a globally traded asset, and points to Bitcoin’s limited supply and the author’s view of fiat debt as longer-term considerations. It also cites a period when Bitcoin rose while the S&P 500 fell, though this observation alone does not establish a lasting change in correlation.

For short-term scenarios, the article expects a contested or divided outcome to risk policy gridlock, weaker risk assets, and lower implied volatility; a clear sweep could lift Bitcoin and implied volatility. For longer-term holders, it describes a put financed partly by selling a call, forming a collar. The example uses March options and stated premiums, but is time-specific. These are scenario opinions, not tested forecasts; the collar caps upside and leaves exposure to losses beyond the put’s protection.

Key ideas

• The article questions whether US election policies affect Bitcoin in the same way as domestic equities.
• It attributes Bitcoin’s longer-term appeal to limited supply and potential distance from fiat debt.
• It associates a mixed election outcome with possible policy gridlock, pressure on risk assets, and lower implied volatility.
• It suggests that a clear political sweep could support Bitcoin and raise its implied volatility.
• A put financed partly by a short call can create a collar to limit downside exposure, while also capping upside.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.