Record Volatility in Crypto ETFs Ahead of U.S. Elections
Ahead of the U.S. presidential elections, investors displayed record levels of activity in the cryptocurrency markets. Notably, there was a significant inflow of funds into Bitcoin as expectations rose around Donald Trump potentially becoming president again.
According to data from The Block, exchange-traded funds (ETFs) that track Bitcoin's spot price recorded their largest daily net influx since March on Wednesday, with a total of $917.2 million. Bitcoin's value saw an increase of approximately 12% in October, which was associated with Trump’s possible presidential victory.
Polls indicate a close race between Trump and the Democrats, while some prediction sites assess Trump’s chances of winning as higher. In this uncertain environment, data provided by crypto derivatives exchange Deribit suggests that investors are preparing for daily price fluctuations of about 3.7% during the election week.
Activity in Bitcoin and Ethereum ETFs
In the week leading up to the elections, weekly net flows for Bitcoin ETFs reached their highest levels since March. Spot Bitcoin ETFs in the U.S. market recorded high net inflows, generally attributed to increased investor interest. There were inflows of $479.4 million on Monday, $870.1 million on Tuesday, and $893.3 million on Wednesday, although a more subdued trend was observed as the weekend approached.
Meanwhile, entries for Ethereum ETFs, while not as large as Bitcoin’s, drew some interest. Spot Ethereum ETFs saw inflows of $7.6 million on Tuesday, $4.4 million on Wednesday, and $13 million on Thursday. Small outflows were observed on Monday and Friday. However, when looking at the overall picture, Ethereum ETFs concluded the week positively for investors.
Current status of Bitcoin and Ethereum
The price of Bitcoin was influenced by inflows from funds at the beginning of the week, reaching $73,600 on Tuesday. However, due to speculations surrounding crypto-friendly Trump’s candidacy, it lost value in the following days. Ethereum, on the other hand, decreased by 1.8% on a weekly basis and struggled to maintain levels above $2,450, starting the new week above that mark.
Bitcoin closed last week below $69,000. Starting the new week with upward momentum, BTC rose to $69,500 in the early hours of the day but retreated to the $68,500 range due to selling pressure in the morning.