Ether (ETH) Set to Experience Exceptional Volatility Before and After the U.S. Elections

Unlike Bitcoin (BTC), which is considered a relatively stable safe haven, ETH is attracting increased attention due to its close link with the decentralized finance (DeFi) ecosystem.

As the United States presidential elections approach on November 5, the crypto market is preparing to face a period of high volatility, with Ether (ETH) at the forefront. Unlike Bitcoin (BTC), which is considered a relatively stable safe haven, ETH is attracting increased attention due to its close link with the decentralized finance (DeFi) ecosystem. As investors watch for potential regulations that could follow the election of a pro-crypto or anti-crypto candidate, they are predicting extreme price movements.

A Peak of Volatility Expected for Ether Before and After the U.S. Elections

Ether, currently valued at $2,372, is set to experience exceptional volatility in the days leading up to and following the U.S. election. Traders anticipate an increase in volatility starting October 25, 2024, coinciding with the electoral deadline. An ETH price fluctuation between -14% and 16% is anticipated within the three days following the election, with a 68% probability. Traders also estimate a 95% chance that the range of movement will be even wider, with variations from -26% to 35%.

This anticipation is primarily related 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 decisions, especially if a candidate hostile to blockchain innovation wins the elections.

Bitcoin, a Safe Haven in the Face of Macroeconomic Storms

While Ether wavers under the threat of regulations, Bitcoin positions itself as a more stable asset, less sensitive to macroeconomic events. Thus, traders appear to have more confidence in Bitcoin’s ability to weather these turbulences. As a “digital store of value,” Bitcoin enjoys a stronger position with less direct exposure to regulatory issues that could arise from the elections. BTC, currently valued at $61,048, is also experiencing volatility, but at a lower level than ETH. Furthermore, 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 unstable periods. Moreover, the Bitcoin ecosystem is less dependent on decentralized applications than Ether, accounting for its better resistance to electoral upheavals.

As the U.S. presidential election approaches, crypto investors must prepare for significant market movements, particularly for Ether, which could undergo major variations depending on the election outcome. Bitcoin, on the other hand, might offer relative stability in this uncertain climate.

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