Election-Driven Fluctuations: Analyzing Bitcoin ETF Inflows and Outflows

The much-anticipated American election has concluded, with Donald Trump elected as the 47th U.S. President. The impact of this election is already visible in the cryptocurrency market, where investors are hopeful that brighter days lie ahead for the industry. The reasons for this optimism are clear.

Speculations had circulated that the election outcome would lead to significant price fluctuations, and this has materialized, with Bitcoin’s price jumping from below $70,000 to $75,000 within 24 hours as the election result was announced. Just one day prior to the election, investors withdrew substantial assets from Bitcoin ETFs.

Data from Coinglass indicates that the largest outflow to date occurred on May 1 of this year, amounting to $563.7 million. On Monday, just before the election, investors pulled out $541 million from Bitcoin ETFs.

Interestingly, BlackRock’s iShares Bitcoin Trust (IBIT) was a standout, recording inflows instead of outflows, with $38.4 million coming in on Monday. In contrast, Fidelity’s Wise Origin Bitcoin Fund (FBTC) saw $138.3 million in outflows, closely followed by ARK 21Shares’ ARKB fund with a similar $138.3 million in outflows. Bitwise’s Bitcoin ETF (BITB) recorded $79.9 million in outflows.

This significant fund movement was largely influenced by the U.S. elections, with expectations that the market would dip after the election’s conclusion. However, the opposite occurred, with a notable increase in Bitcoin’s value.

Meanwhile, analysts at J.P. Morgan predicted that Bitcoin prices would soar if Trump won, citing his open support for the cryptocurrency sector and his affiliation with crypto-backed World Liberty Financial. Bernstein also offered predictions on BTC’s price trajectory depending on the election results, estimating Bitcoin could rise to $90,000 if Trump were victorious or fall to $50,000 if Kamala Harris won. Conversely, VanEck analysts suggested that a Kamala Harris victory might weaken the U.S. dollar, potentially encouraging broader crypto adoption. They argued that a Harris victory could be bullish for Bitcoin in the long term.