The upcoming U.S. elections are projected to significantly impact cryptocurrency markets. Many institutions are preparing for potential volatility in Bitcoin (BTC) prices, according to market analysts.

Increased Market Activity

Recent reports indicate a surge in short-term borrowing rates within institutional crypto lending markets as the November 5 election draws nearer. Sidney Powell, co-founder of Maple Finance, reported an increase in loan requests from larger institutions, driven by expectations of rising asset prices before the election.

"We're seeing more inbound requests for borrowing from some of the larger institutions. Demand for larger-ticket loans and borrowing against open trade credit has increased significantly," said Powell.

This increase in borrowing is indicative of institutions gearing up for a potential price rally in cryptocurrencies.

Bullish Positioning in Derivatives Market

The demand for call options on the Chicago Mercantile Exchange (CME) for Bitcoin is also at an all-time high as traders position themselves for potential significant price movements. According to Joshua Lim of Arbelos Markets, the market has witnessed sizable call option trades, particularly in the lead-up to the elections.

"We're seeing a huge uptick in CME call buying into the election, including some of the largest ever prints on the exchange," Lim noted.

With more than $350 million in notional value traded in November options recently, traders expect Bitcoin prices will likely rise post-election, indicating a bullish sentiment leading into the election period.