Election Volatility Gets an Insurance Policy, Not a Permanent Stay 🗳️

Bitcoin options markets point to a brief volatility burst around the Nov. 4 U.S. midterm elections, with the $BTC $77,884.65 implied volatility term structure showing a pronounced election-day kink rather than prolonged turbulence. Implied volatility, or IV, measures the price swings options traders expect across different expiry dates, when bullish calls and bearish puts are settled and contracts cease to exist.

IV for options expiring Nov. 4 is about 43.5%, notably higher than the roughly 36% priced for later expiries. The curve returns to near 36% by late November, indicating that traders are pricing increased volatility as election results and newsroom calls arrive. Ether’s IV term structure shows a similar pattern.

Futures open interest, the total value of outstanding futures contracts, has remained largely steady at $58 billion for bitcoin and $23.58 billion for ether over the past 24 hours. Combined with the Nov. 4 IV spike, Laevitas said the market reflects hedging rather than fresh directional bets. “Flat open interest alongside a funding flip and a five-point skew move describes hedging demand layered onto existing risk, and that kind of demand historically decays hard once the event it was bought for clears,” data tracking platform Laevitas said. The skew measures the price gap between puts and calls, with the five-point move indicating that downside protection is currently more expensive. Laevitas said demand for that protection tends to fade quickly after the event, allowing the curve’s election bulge to flatten.

The broader market has also steadied, with bitcoin and ether trading above Friday’s lows following the hack at crypto exchange Binance at about $78,000 and $2,290, respectively. Galaxy’s firmwide research head Alex Thorn said: “Bitcoin closes above 50 week moving average for 7th straight week despite $6b+ hack on world’s biggest crypto exchange. great to see $BTC ’s resilience and ability to keep the current technical market structure intact,” Thorn noted on X.