How do election results affect cryptocurrencies? Bitcoin's impact is limited, while small coins may face significant shocks

On Tuesday, Bitcoin surged nearly 5%, exceeding $70,400 during the session. Dogecoin saw an even larger increase, soaring 18%, partly benefiting from comments made by its long-time supporter Elon Musk. Musk mentioned that if Trump wins the election, he would establish a government efficiency department, abbreviated as D.O.G.E. Solana also saw a significant increase that day, surpassing Bitcoin. For most of this year, smaller cryptocurrencies, such as Dogecoin and Solana, have generally lagged behind Bitcoin. With the U.S. presidential election approaching, these cryptocurrencies may experience greater volatility. Some industry insiders believe that the U.S. election will not have much impact on Bitcoin. Altcoins are either big winners or big losers: Harris's victory may mean that the recovery of altcoins will not be significant. Harris will intensify regulatory crackdowns on the crypto industry. Bitcoin and Ethereum will survive because they are considered more decentralized than other tokens. Trump, on the other hand, has repeatedly expressed strong support for cryptocurrencies. His victory is seen as more favorable for the crypto industry. Altcoins refer to smaller cryptocurrencies outside of Bitcoin, which have typically performed better during bull market cycles, especially after significant rises in Bitcoin, when investors tend to shift to smaller market cap coins. However, over the past year, aside from a few popular coins, altcoins have generally not outperformed Bitcoin. Dogecoin is considered by many to be the pioneer of meme coins. Some traders also believe that regardless of the election outcome, the overall environment will be favorable for the cryptocurrency market. After the election, the market will refocus on macroeconomic factors and the Federal Reserve. In the short term, the cryptocurrency market is expected to be extremely sensitive to the election results. The cryptocurrency options market indicates that there will be a peak in short-term volatility before the election results are announced. Significant price fluctuations in Bitcoin could trigger liquidations due to leveraged positions. If Harris wins, the market could quickly decline in a very short time. Nevertheless, this reaction is expected to be temporary, as the removal of uncertainty and an expansionary macro environment will support a strong upward momentum for cryptocurrencies before the end of the year. According to data from Deribit, the largest cryptocurrency options exchange, demand for Bitcoin options surrounding the U.S. election is strong, with put options being more expensive and call options having strike prices significantly higher than the current price. This indicates a divergence in the market regarding the election outcome: more traders are hedging against a Harris victory, while others remain optimistic about Trump's election. The rise in put option premiums can also be attributed to high hedging demand