Bitcoin exchange-traded funds (ETFs) have had one of their biggest one-day outflows ever as the US gets closer to a crucial election. On November 4, investors withdrew $541.1 million from 11 U.S.-based spot Bitcoin ETFs. Only a $563.7 million outflow in May, following a sharp decline in Bitcoin’s price, exceeded this enormous outflow, making it the second-highest in the history of Bitcoin ETFs.
Given that the price of Bitcoin has dropped 4.6% over the past week and 1.7% in the last day, the spike in outflows is believed to be a reflection of traders’ cautious approach ahead of the November 5 U.S. election. Many investors seem to be hedging their bets as political uncertainty looms, especially in light of the close contest between Donald Trump and Kamala Harris. Investors are on edge as polls indicate Harris has a slim lead, but estimates for both candidates are still tight.
The recent withdrawals ended a seven-day run of inflows, demonstrating how susceptible the cryptocurrency market is to political developments. James Butterfill, head of research at CoinShares, claims that the euphoria surrounding a possible Republican victory was a major factor in last week’s $2.2 billion in net inflows. However, Friday saw slight outflows as polls changed, demonstrating how sensitive Bitcoin is to election-related factors.
Because of his support for digital assets, Trump has gained popularity on betting sites and gained favor among many in the cryptocurrency sector. His odds have recently changed in response to shifting polling data. A Trump victory, according to some analysts, may drive up the price of Bitcoin and possibly put the virtual currency close to $100,000.
The cryptocurrency market is ready for big changes as investors closely monitor the election’s conclusion.
