U.S.-based Bitcoin exchange-traded funds (ETFs) faced their second-largest outflow day in history on November 4, just one day before a highly anticipated election. According to CoinGlass, the 11 spot Bitcoin ETFs recorded a staggering net outflow of $541.1 million, a sign of traders trimming their positions amid election uncertainty. The only ETF to attract inflows was BlackRock’s iShares Bitcoin Trust ETF (IBIT), which secured $38.4 million during this tumultuous period.
The outflows on November 4 mark a significant moment in the ongoing volatility surrounding Bitcoin investments. Previously, the largest outflow occurred on May 1, when these ETFs experienced a net withdrawal of $563.7 million, coinciding with a sharp decline in Bitcoin’s price, which dropped 10.7% to around $60,000. As the market fluctuates, traders seem increasingly wary, with Bitcoin’s value falling 4.6% over the past week and 1.7% in just the last 24 hours, bringing it to approximately $68,000.
Breaking down the outflows, the Fidelity Wise Origin Bitcoin Fund experienced the largest withdrawal, amounting to $169.6 million. This was closely followed by ARK 21Shares Bitcoin ETF, which saw $138.3 million exit its coffers. Grayscale’s two Bitcoin funds also contributed significantly to the overall outflows, totaling $153.2 million. Notably, the Grayscale Bitcoin Trust (GBTC) recorded $63.7 million in outflows, while its mini GBTC saw $89.5 million pulled out, marking the fifth and third largest outflows for the day, respectively.
The trading week leading up to November 1 had seen a robust $2.2 billion net inflow into U.S. Bitcoin funds, reflecting a strong bullish sentiment earlier in the week. However, the atmosphere shifted as election polls indicated a close race between candidates, causing minor outflows by Friday. James Butterfill, head of research at CoinShares, remarked that the euphoria surrounding the potential Republican victory had initially driven inflows, but as polling dynamics changed, the market became increasingly reactive to election sentiments.
As the election draws near, polls show Vice President Kamala Harris and former President Donald Trump essentially tied, with Harris leading by just 1.2 percentage points according to FiveThirtyEight data. Meanwhile, Trump’s odds of securing the presidency have seen fluctuations on crypto betting platform Polymarket, where his chances dipped to 53.8% on November 3 after peaking at 67% on October 30. Currently, his winning odds stand at just over 59%.
Trump’s pro-crypto stance has made him a favored candidate within the crypto community, with speculation that Bitcoin could potentially soar to $100,000 if he were to return to the White House. As traders navigate this uncertain landscape, the interaction between political developments and cryptocurrency performance remains a critical focus for investors, emphasizing the heightened sensitivity of Bitcoin to external factors like U.S. elections.
In summary, the recent outflows from Bitcoin ETFs highlight the current market’s volatility and the profound impact of political events on cryptocurrency trading. With the election just around the corner, all eyes are on the results and their implications for the future of Bitcoin and the broader crypto landscape.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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