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As markets continue to digest the 2020 U.S. presidential election’s unique uncertainties, bitcoin traders say there’s capital on the sidelines that could propel the digital currency’s price to further highs.

The price of bitcoin has swelled during the past week, breaking through key price levels, including $15,000. Bitcoin isn’t the only crypto trading in the green, with Ethereum’s native crypto also gaining more than 10% over the same period. At last check, ETH was trading hands at $440 apiece.

Stocks also soared into the close on Friday, ending what is set to be the best week for the S&P 500 since April.

As for crypto, trading firm executives say investors are still sitting on the sidelines and waiting to allocate more into cryptocurrencies once the results of the election are finalized. At last check, former Vice President Joe Biden appeared favored to clinch the Electoral College, though ballots continue to be incrementally counted in several U.S. states. 

“We saw this as a great time to go risk-one,” said Kyle Davies, co-founder of Three Arrows Capital, said in an episode of The Block Live. “As soon as this clears, all this cash is going to be deployed.”

That sentiment was echoed by Joshua Lim, head of derivatives at Genesis Global Trading, who told The Block that the firm’s volumes have been “relatively two-way pivoting around the $14k level — we expect real-money buying of BTC and ETH to resume in earnest once there is more clarity.”

“The week leading into the election saw a massive futures and options expiration at the end of October,” Lim added. “Our desk handled a huge amount of CME-related volumes, both as spot OTC traded as a spread to the settlement benchmark price (BRR), as well as in the form of exchange-for-physical blocks, as traders adjusted their outright positioning and basis exposure.”

Underpinning the recent price action has been a lack of liquidations on futures platforms as traders move away from BitMEX, as noted by Akshai Rajendran of Pattern Research, who said during an industry panel Thursday that “the loss of BitMEX and the loss of liquidations” has translated into less downward pressure.

“I think the reason we’re not seeing the futures basis going wild on this rally—it’s driven by spot buying,” he said in a message to The Block, adding: “This also suggests staying power to me, as there’s no leverage to liquidate.”

Reporting this morning from CoinDesk shows BitMEX reported $54 million in liquidated bitcoin futures contract, well below the $75 million figure clocked in on October 21 when bitcoin was racing towards new highs for the year. 

Indeed, traders say this market rally has been quieter, noting fewer exchange outages and relatively muted volatility (although rolling realized volatility has picked up slightly). 

“I’m comparing realized vol and spreads on a 10-20% rally 6 months ago or 1yr ago vs now. It’s a lot more tame now relative to what this might have looked like last year,” Rajendran said. 

Recent developments in the market show this rally might have legs that the 2017 rally to nearly $20,000 did not, says Three Arrow’s Davies. 

“I think it is a confluence of a number of things,” he said. 

Davies said some firms are looking to allocate towards bitcoin as part of their treasury reserve strategy, following in the footsteps of MicroStrategy and Square. 

“DBS, which is the largest company in Singapore, the largest bank in Southeast Asia has announced they are going to have a cryptocurrency exchange, custody, and other solutions as well,” he said, concluding:

“Once one company decides they are going to hold bitcoin, immediately other adjacent companies need to ask the same question. When the large company in Singapore decides to do that, it becomes this cascading effect. It was not just one thing. Not just [stimulus], the DeFi yields coming off, corporate treasury stacking—but will all these happening I see this one-upmanship.”

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