As the US elections approach, the notion that Bitcoin and the S&P 500 index generally move in the same direction has been called into question. Data from the options market showed increased demand for short-term call options on Bitcoin, while interest in put options on the S&P 500 rose. These divergent trends suggest that, unlike investors expecting a rise in Bitcoin's price during the election period, there are investors who are worried about a decline in the S&P 500.
According to analysts, this divergence could signal a major market move. Eamonn Gashier, CEO of Block Scholes, stated that the correlation between Bitcoin and the S&P 500 could be broken or a market is mispriced. As the elections approach, some investors are taking positions in anticipation of lower volatility. The decline in the implied volatility of options on Deribit suggests that negative expectations for volatility are increasing.
