Ahead of the US presidential elections on November 5, 2024, the crypto market is preparing for a period of high volatility, and Ether (ETH) is at the forefront. Unlike Bitcoin (BTC), considered a relatively stable safe haven, ETH is attracting increased attention due to its close connection to the decentralized finance (DeFi) ecosystem. As investors scrutinize potential regulations that could follow the election of a pro-crypto or anti-crypto candidate, they are predicting extreme price movements.
A spike in volatility expected for Ether before and after the US elections
Ether, currently valued at $2,372, is poised for exceptional volatility in the days leading up to and following the US election. Traders anticipate an increase in volatility from October 25, 2024, which coincides with the November 5 election deadline. An ETH price fluctuation between -14% and +16% is therefore expected in the three days following the election, with a probability of 68%. Traders also estimate that there is a 95% chance that the range of moves will be even wider, with variations from -26% to +35%.
This anticipation is mainly linked to fears of potential regulations in the DeFi sector, an area where Ether plays a key role as the platform of choice for smart contracts and other decentralized applications. The very nature of DeFi makes ETH more vulnerable to political decisionsespecially if a candidate hostile to blockchain innovation wins the elections.
Bitcoin, a safe haven in the face of macroeconomic storms
While Ether falters under the threat of regulations, Bitcoin is positioning itself as a more stable asset and less sensitive to macroeconomic events. Thus, traders seem to have more confidence in Bitcoin's ability to weather this turbulence. As a “digital store of value,” Bitcoin enjoys a stronger position, with less direct exposure to regulatory issues that could arise from the election. BTC, currently valued at $61,048, also experiences volatility, but at a lesser level compared to ETH. In addition, its future volatility is estimated at 69.8% compared to 76.6% for Ether.
Indeed, Bitcoin's status as a “store of value” limits its direct exposure to political uncertainties, allowing it to act as a safe haven asset during periods of instability. In addition, the Bitcoin ecosystem depends less on decentralized applications than Ether, which explains its better resistance to electoral upheavals.
As the US presidential election approaches, crypto investors should prepare for significant market movements, particularly for Ether, which could see major swings depending on the outcome of the polls. Bitcoin, for its part, could offer relative stability in this uncertain climate.
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