On Nov. 4, U.S. spot Bitcoin ETFs experienced high outflows of $541.1 million, the worst one-day outflow ever in absolute dollar terms and the second-largest one-day outflow on record by dollar value. According to CoinGlass, only BlackRock’s iShares Bitcoin Trust ETF (IBIT) has reported inflows, with the fund closing the day with a total of $38.4 million. It was the largest exit since May 1, where Bitcoin fell 10.7% to just over $60,000, with net redemptions of ETFs at $563.7 million.
Investors Pull Back on Bitcoin ETFs Ahead of 2024 Election
Bitcoin bet slip ahead of election Investors seem to be easing off their Bitcoin exposure leading into the U.S. election, set to take place Tuesday, Nov.5. Bitcoin (above $68,000) has lost -4.6% for the week ($ -1.7% in the last 24hrs).
According to CoinGlass, Nov. 4 also marked the second day of outflows for Bitcoin ETFs, breaking a streak of seven consecutive inflows. Grayscale’s two primary funds, the Grayscale Bitcoin Trust (GBTC) and its smaller counterpart were hit particularly hard, with outflows totalling $153.2 million. The GBTC saw $63.7 million withdrawn, while the mini GBTC recorded an $89.5 million outflow, making it the third-largest outflow for the day.
The prior week saw a net inflow of $2.2 billion into U.S. Bitcoin funds, but this momentum fell with a notable $55 million outflow at the week’s end. CoinShares head of research, James Butterfill, attributed much of the recent inflow to “euphoria surrounding the prospect of a Republican victory” in the election.
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Investors React to 2024 Election Polls
“As polls have shifted, we observed modest outflows on Friday, highlighting Bitcoin’s sensitivity to the U.S. election landscape,” Butterfill noted. As of Nov. 4, Kamala Harris and Donald Trump are nearly tied in the polls, with Harris holding a slim 1.2-point lead, according to FiveThirtyEight. On Polymarket, a crypto betting platform, Trump’s odds have fluctuated sharply—dropping from a peak of 67% on Oct. 30 to a low of 53.8% on Nov. 3 before stabilizing above 59%.
With Trump generally favoured by the crypto community for his pro-crypto stance, some traders speculate that a Trump win could propel Bitcoin’s price toward $100,000 if he secures a second term in the White House. The latest result of the election poll with Harris holding a slim lead makes some investors more cautious and some results to pulling out their investment in crypto.
The Bottomline
With the US election approaching, its effects ripple over the cryptocurrency market, and investors are locking in huge amounts to ensure safety. Volatility, though, is likely regardless of the outcome, with the risk of regulatory and fiscal changes on the horizon. Crypto investors responded with a cautious hand, and many have moved to spread out their investments or take a break from riskier environments. Market dynamics, however, could greatly be affected by the election results, and it’s causing them to be extra vigilant and to prepare their strategy to brace for the external challenge ahead.
The volatility of crypto is certain, always plan your trades and follow your strategy.
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