As Bitcoin approached a record high, BlackRock’s iShares Bitcoin Trust—a major player in cryptocurrency investment—saw a rare event: a day of net outflows. Since its inception in January, this marked only the sixth instance of net outflows for the fund, reflecting investor caution on a key date in the U.S. political calendar: Election Day.
Wider Market Shifts in U.S.-Based Bitcoin ETFs
BlackRock’s fund wasn’t the only one impacted. Across the 11 U.S.-based spot Bitcoin ETFs, total net outflows reached $116.8 million. The Fidelity Wise Origin Bitcoin Fund led with $68.2 million in withdrawals. However, there were exceptions: the Bitwise Bitcoin ETF recorded an inflow of $19.3 million, bucking the general trend.
This marked the third consecutive session of net outflows for U.S. spot Bitcoin ETFs, following a substantial sell-off that saw over half a billion dollars in withdrawals—specifically, $541.1 million—the second-largest single-day outflow recorded.
Bitcoin’s Rally Amid Election Results
Despite these capital movements, Bitcoin rebounded as U.S. election results started to roll in, hitting an all-time high of $75,000. The political and economic implications of the election clearly influenced market sentiment, spurring a renewed appetite for risk.
Henrik Andersson, chief investment officer at Apollo Crypto, shared his insights: “Bitcoin is currently the election trade for traders globally,” he explained. Citing an estimated 80–90% likelihood of a Donald Trump victory based on various indicators, Andersson suggested this expectation might be driving Bitcoin’s upward momentum, with a Trump win potentially pushing Bitcoin to $100,000 by year’s end.
Political Events and Bitcoin’s Safe-Haven Appeal
Bitcoin’s price movements often correlate with political developments, as it acts as a decentralized asset, free from governmental control. This positioning often makes it a hedge in uncertain times, a factor that may explain Bitcoin’s appeal during the U.S. election.
Adding his perspective, Nate Geraci, president of ETF Store, cautioned in a blog post that while election impacts on broader investments are often exaggerated, regulatory factors in the crypto space remain pivotal. The SEC’s stance on crypto could either foster stability or heighten volatility. Geraci underscored the need for a bipartisan regulatory framework, noting it could bring stability and predictability to crypto ETFs in the U.S.
Regulatory Outlook and the Future of Crypto ETFs
Geraci also highlighted that U.S. political changes could influence crypto ETF innovation, with regulatory shifts potentially accelerating or stalling crypto-based financial products. This suggests that the election’s outcomes might not only impact Bitcoin’s short-term price but could also shape the future of crypto investments as they navigate evolving legal landscapes.
In essence, the interplay between Bitcoin’s price movements and the U.S. election underscores how political outcomes and financial markets are increasingly intertwined—especially for emerging asset classes like cryptocurrencies. While institutional investors may adopt a cautious stance during uncertain periods, individual and institutional players alike reflect a sustained appetite for crypto exposure. As the election dust settles, the long-term effects will likely unfold in regulatory changes and investor sentiment, guiding how Bitcoin and crypto ETFs evolve in the future.
