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In summary
- Election Day is here and traditional investors appear to be looking to reduce risk before voters hit the polls.
- On Monday, US Bitcoin exchange-traded funds (ETFs) experienced large outflows with $541 million withdrawn from investment products.
- This election-related outflow is nearly the largest outflow Bitcoin ETFs have seen since their inception, according to data from CoinGlass, second only to a $563.7 outflow on May 1 amid a large drop in the price of Bitcoin.
Election Day is here and it appears that traditional investors were looking to reduce risk before voters hit the polls. On Monday, US Bitcoin exchange-traded funds (ETFs) experienced large outflows with $541 million withdrawn from investment products.
This election-related outflow is nearly the largest outflow Bitcoin ETFs have seen since their inception, according to data from CoinGlass, second only to a $563.7 outflow on May 1 amid a large drop in the price of Bitcoin.
BlackRock iShares Bitcoin Trust (IBIT) was the only fund to record inflows on Monday, with $38.4 million, while all other funds were flat or saw significant outflows.
The Fidelity Wise Origin Bitcoin Fund (FBTC), was the most notable with withdrawals of $138.3 million, while the ARK 21Shares Bitcoin ETF (ARKB) and the Bitwise Bitcoin ETF (BITB) lost $138.3 million and $79.9 million respectively.
By comparison, US Bitcoin ETFs on Friday saw just $54.9 million in outflows after experiencing seven consecutive days of inflows.
This is probably due to the US presidential election.
Donald Trump has long been considered the ‘Cryptocurrency candidate’ due to his vocal support for Bitcoin and cryptocurrencies in general. As a result, JPMorgan predicted that Bitcoin would see gains if the Republican won the race.
A recent report from Bernstein claimed that Bitcoin would reach $90,000 in the coming weeks if Trump wins the election. However, if Harris were to win, it would drop to just $50,000.
This prediction is due to Kamala Harris’ rather weak stance on cryptocurrencies, primarily stating that she would encourage Blockchain innovation and that she would regulate the technology to protect black men. This has led traders to believe that he would be a worse option for Bitcoin compared to Trump.
That said, VanEck analysts speculated that her tenure as President could weaken the US dollar and encourage Bitcoin adoption, which would be bullish for the price of the leading cryptocurrency.
We are also seeing uncertainty with the price of Bitcoin falling 3.4% over the last week, while Ethereum falls even further, 7.3%.
At the time of writing, prediction market Polymarket has Trump with a 62% chance of winning, with Harris trailing at 38%.
This contradicts a major Iowa poll by veteran pollster Ann Selzer, which favored Harris over Trump by three percentage points. If correct, this could mean disastrous things for Republicans. As this news spread, Polymarket odds narrowed sharply, Bitcoin fell, and total cryptocurrency liquidations reached $315 million in 24 hours.
Edited by Stacy Elliott.
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