Key Highlights:
- U.S. Crypto ETFs hit $917 million in a single-day inflow on October 30
- Rising interest attributed to election uncertainty, especially around Trump
- Analysts predict potential post-election crypto-friendly legislation
As the U.S. presidential election draws closer, crypto ETFs are seeing a dramatic influx of investments. On October 30, exchange-traded funds (ETFs) tracking Bitcoin recorded a massive $917.2 million inflow, marking the highest single-day investment since March.
Investors are wagering that the election could lead to market movements and heightened volatility, especially with Donald Trump’s candidacy stirring speculation about potential crypto-friendly policies.
Election Anticipation Drives Record ETF Inflows
Crypto ETFs have been surging in popularity as investors look to capitalize on the possible impacts of the U.S. election on the cryptocurrency market.
The data provider, The Block, reported that BlackRock's iShares Bitcoin Trust ETF saw an impressive $872 million inflow on October 30, accounting for the majority of the total influx.
This ETF, which launched in January, experienced its largest single-day inflow, reflecting a growing interest in cryptocurrency investments amidst election uncertainty.
Analysts from Ryze Labs pointed to the potential for a “Republican sweep” as a primary reason for the rush into crypto ETFs. According to a statement from Ryze Labs, “The rising odds of a Republican sweep have fueled optimism for potential crypto-friendly legislation in Congress post-election.”
This view resonates with many investors who see Trump as a pro-crypto candidate, one who might promote policies favorable to the digital assets sector if elected.
Bitcoin Volatility: Market Braces for Swings
Investors are gearing up for what could be a volatile election week, with market indicators suggesting significant price fluctuations in Bitcoin.
Forward-implied volatility data from crypto derivatives exchange Deribit suggests potential daily swings of around 3.7% for Bitcoin through November 8.
Nick Forster, founder of crypto trading platform Derive.xyz, further emphasized the election's impact on Bitcoin's price, indicating “a one-third chance of a 10% upward move on election day.”
Bitcoin’s price, currently hovering near its yearly high of $74,000, reflects growing anticipation. The cryptocurrency recorded a 12% surge in October, fueled in part by Trump’s rising odds in election betting markets.
This surge has brought Bitcoin closer to an all-time peak of $73,798, recorded in March.
Open interest on crypto derivatives exchanges also reached a record high, hitting $43.61 billion as of Tuesday, highlighting the increased trading activity as investors position themselves for potential election-driven movements.
However, experts predict that Bitcoin could stabilize after election week, with some investors maintaining a positive long-term outlook for the cryptocurrency.
Impact of Election on Crypto Legislation
The U.S. election’s outcome could significantly shape the future of cryptocurrency regulation. While Trump’s pro-crypto stance has resonated with certain investors, his opponent, Vice President Kamala Harris, has expressed support for a comprehensive regulatory framework for the industry.
This division has further driven speculation and investment trends, as each candidate’s policies could lead to vastly different trajectories for the crypto sector.
Should Trump secure a second term, investors are hopeful for relaxed regulations that could stimulate growth within the digital assets space. Conversely, Harris’s proposed regulatory framework might impose more restrictions, potentially impacting the market differently.
Given this divergence, the election’s outcome is expected to set the stage for how the crypto industry develops in the near term.