Crypto ETFs See Strong Inflows as U.S. Election 2024 Nears

Crypto ETFs Introduction
- Overview of Crypto ETF Inflows and Election Impact
Surge in Bitcoin ETF Inflows
- Record-Breaking Investments in BlackRock’s iShares Bitcoin Trust
Bitcoin’s October Rally and Election Sentiment
- Trump as a Pro-Crypto Candidate
Analyst and Market Projections
- Potential for Crypto-Friendly Legislation
- Polls and Betting Market Insights
Anticipated Volatility and Derivatives Activity
- Futures Market Expectations
- Record Highs in Crypto Derivatives
Post-Election Bitcoin Projections
- Expectations for Stability and Growth
Conclusion

Nov 1 (Reuters) – Investors are increasingly directing funds toward cryptocurrency-focused exchange-traded funds (ETFs), especially those tracking Bitcoin, as the U.S. presidential election approaches. Many see a potential victory for Republican candidate Donald Trump as a catalyst for positive regulatory changes in the crypto sector, while also bracing for heightened price fluctuations in the digital currency during the election period, recent data reveals.

Inflow Surge for Bitcoin ETFs Highlights Investor Sentiment

On Wednesday, ETFs that track the spot price of Bitcoin saw a dramatic surge in inflows, reaching a total of $917.2 million in a single day, according to data from The Block, a trusted source of digital assets analytics. This figure represents the highest daily net inflow since March of this year, underscoring a significant uptick in interest and confidence in cryptocurrency as a financial asset.

BlackRock’s iShares Bitcoin Trust ETF Leads with Record-Breaking Inflows

Among the funds, BlackRock’s iShares Bitcoin Trust ETF (ticker: IBIT.O) drew particular attention. As the largest spot Bitcoin fund in terms of assets under management, it brought in $872 million in net flows on Wednesday alone—a record-breaking one-day haul since its inception in January. The scale of these inflows indicates mounting anticipation among investors for potential favorable policy shifts under a pro-crypto administration.

Bitcoin Rallies in October amid Pro-Crypto Political Sentiment

Bitcoin’s price rose approximately 12% throughout October, driven by the anticipation of a Trump victory. Trump has positioned himself as a supporter of cryptocurrency, appealing to investors who see him as likely to advocate for crypto-friendly regulatory measures if he secures a second term.

Analysts Highlight Potential for Crypto-Friendly Legislation Post-Election

Ryze Labs analysts suggest that the increasing likelihood of a Republican win has fueled optimism within the crypto community. Investors and industry insiders alike speculate that a GOP-led administration could drive forward legislation supportive of the digital asset industry, particularly if Republicans gain control of Congress alongside a Trump presidency.

Polls and Betting Markets Reflect a Tight Race with Varying Odds

While traditional polling data indicates a close race between Trump and Democratic candidate Kamala Harris, betting platforms like Polymarket display a higher probability for a Trump win. This variance in expectations reflects both the high-stakes nature of the election and its potential implications for financial markets, especially cryptocurrency.

Market Data Signals Anticipated Volatility Leading Up to Election Day

Amid these political dynamics, futures markets reveal a clear sense of caution among investors. Forward-implied volatility data from the crypto derivatives exchange Deribit points to potential daily price movements in Bitcoin of about 3.7% in either direction leading up to and through Nov. 8, underscoring a heightened risk environment as the election unfolds.

Crypto Derivatives Show Record-High Market Activity as Traders Brace for Shifts

Crypto derivatives activity has surged to unprecedented levels. Open interest on derivatives exchanges—a measure of the number of active contracts—reached an all-time high of $43.61 billion on Tuesday, per data from Coinglass. This milestone highlights the intensifying engagement of market participants who are positioning themselves ahead of potential election-driven price changes.

Expectations of Post-Election Stabilization and Price Gains

While volatility is expected to dominate the short term, market indicators suggest an optimistic outlook for Bitcoin in the longer term. Deribit CEO Luuk Strijers noted that derivatives activity implies traders expect post-election stabilization, with the potential for Bitcoin’s price to continue its upward trajectory once the political dust settles.

Crypto ETFs Experience Significant Inflows as U.S. Election Approaches; Traders Prepare for High Volatility