US Bitcoin ETFs Record Massive Outflow Ahead of Election

Jimmy Aki
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On November 4, the US Bitcoin exchange-traded funds (ETFs) saw one of their largest single-day outflows ahead of the November 5 election that could sway market dynamics.

Top Funds See Major Outflows

According to CoinGlass, eleven spot Bitcoin ETFs experienced a combined outflow of $541.1 million, marking the second-largest daily outflow on record.

Fidelity’s Wise Origin Bitcoin Fund took the hardest hit, recording $169.6 million in outflows. The ARK 21Shares Bitcoin ETF followed closely with $138.3 million withdrawn.

Grayscale’s two funds – the Grayscale Bitcoin Trust (GBTC) and its mini version – saw a combined outflow of $153.2 million. GBTC, which has struggled with minimal net inflow days this year, recorded $63.7 million in withdrawals, while its smaller counterpart registered $89.5 million.

The timing of these withdrawals suggests that investors may be rebalancing their portfolios amid heightened political uncertainty. Historically, financial markets tend to react to changes in the political landscape, and the upcoming election has introduced additional tension.

According to CoinShares’ head of research, James Butterfill, “As polls have turned, we saw minor outflows on Friday, highlighting how sensitive Bitcoin is to the US elections at present.”

Notably, Bitcoin ETFs have experienced major outflows only once before, on May 1, when $563.7 million was withdrawn as Bitcoin’s price dropped by 10.7% within a week, falling to $60,000.

Analysts suggest that a similar reaction is unfolding as the election adds pressure on investors to reduce risk exposure. Bitcoin’s recent market performance reflects these concerns. Nevertheless, expert opinions suggest that Bitcoin ETFs would rally Bitcoin to a new high. For instance, Standard Chartered Bank has predicted that spot ETFs will boost Bitcoin prices to $200,000 by the end of 2025.

The cryptocurrency has seen a 4.6% drop in the past seven days, trading near $68,000 as of November 4. Although Bitcoin has remained relatively resilient in 2024, this recent decline suggests heightened caution among traders.

Impact of Election Uncertainty on Bitcoin ETFs

Bitcoin ETFs recorded one of the significant inflows last week, amounting to $2.2 billion. However, by Friday, November 1, funds had already started seeing minor outflows totaling nearly $55 million. This fluctuation reflects investor sentiment as expectations around election results evolved.

For traders, the election’s outcome could greatly influence Bitcoin and other digital asset markets.

The Republican candidate, former President Donald Trump, is favored by many in the crypto industry due to his pro-crypto stance.

Polymarket, a cryptocurrency betting platform, saw his winning odds fluctuate significantly. Trump’s chances, which peaked at 67% on October 30, fell to 53.8% on November 3 before stabilizing at 59%.

In contrast, Vice President Kamala Harris and Trump are effectively tied in public opinion polls. Data from FiveThirtyEight shows Harris with a slight lead, edging Trump by just 1.2 percentage points.

Despite the slim margin, any shift in the political landscape could impact investor confidence in the US and the sentiment around cryptocurrencies.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.