BlackRock’s spot Bitcoin (BTC) exchange-traded fund (ETF), the iShares Bitcoin Trust (IBIT), has experienced a notable downturn, posting its sixth day of net outflows since its January launch. On November 5, the fund saw an outflow of $44.2 million, according to CoinGlass data. This shift coincided with the U.S. midterm elections, sparking speculation that institutional investors went “risk-off” as political uncertainty loomed.
While this marks the sixth day of outflows for IBIT, it is noteworthy that the ETF had previously only seen one other outflow this year—$10.8 million on October 10. This relatively low frequency of outflows points to the volatile nature of Bitcoin and the broader cryptocurrency market, with investor sentiment heavily influenced by both global economic conditions and local political events.
The outflows from BlackRock’s Bitcoin ETF reflect a larger trend across U.S. spot Bitcoin (BTC) ETFs. In total, the 11 U.S.-based spot Bitcoin ETFs saw net outflows of $116.8 million, with the largest contributor being the Fidelity Wise Origin Bitcoin Fund (FBTC), which saw $68.2 million leave the fund. Notably, the only ETF to experience an inflow on November 5 was the Bitwise Bitcoin ETF (BITB), which recorded $19.3 million in new investments. This marks the third consecutive trading day of outflows for U.S. Bitcoin ETFs, coming just a day after the second-largest day of outflows in the sector’s history, totaling over $541 million.
Despite these outflows from Bitcoin ETFs, spot crypto markets showed resilience, especially after the U.S. election results began rolling in. Bitcoin (BTC) prices surged to new heights, briefly tapping $75,000—an all-time high. This uptick in Bitcoin’s price has been attributed to the market’s anticipation of election outcomes, with some traders viewing Bitcoin (BTC) as a hedge against uncertainty. Apollo Crypto’s Chief Investment Officer Henrik Andersson told Cointelegraph that “Bitcoin is currently the election trade for traders globally.” He speculated that the market is pricing in an 80% to 90% probability of a Donald Trump victory, with Bitcoin potentially reaching $100,000 by the end of the year if his victory materializes.
While election results often do not have a lasting impact on investments, the regulatory environment in the U.S., particularly the leadership of the Securities and Exchange Commission (SEC), remains a critical factor in shaping the future of Bitcoin ETFs. Nate Geraci, president of ETF Store, pointed out that the influence of political events on investments is often overstated, but the role of the SEC in driving ETF innovation is undeniable.
The ongoing fluctuations in Bitcoin ETF inflows and outflows underline the complexity of the cryptocurrency market. As institutional investors continue to navigate the regulatory landscape and global uncertainties, the future of Bitcoin ETFs will remain a key focal point for both traders and regulators.
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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