Investors are placing bets on Bitcoin’s performance influenced by the potential re-election of Donald Trump, anticipating significant fluctuations during election week. Here’s a breakdown of the recent activity in Bitcoin-related investments:
- ETF Inflows Surge: Bitcoin-focused ETFs, particularly BlackRock’s iShares Bitcoin Trust ETF, experienced record inflows, with $917.2 million added in just one day—the highest since March. The iShares Bitcoin Trust alone attracted $872 million, marking its largest single-day inflow since its inception in January.
- Bitcoin’s Price Rally: October saw bitcoin’s price jump by about 12%, driven by the prospect of a Trump win and his crypto-friendly stance, which investors believe could lead to favourable legislation for cryptocurrencies.
- Market Volatility Expected: As the election approaches, the market is bracing for volatility. Data from Deribit suggests that bitcoin could see daily price movements of around 3.7% in either direction through November 8, reflecting the market’s uncertainty.
- Record Derivative Activity: The open interest in crypto derivatives has reached a new peak at $43.61 billion, indicating robust market activity and trader expectations that volatility might decrease post-election, potentially leading to further gains for bitcoin.
This surge in investment and the anticipation of legislative support underscore the significant impact of political developments on cryptocurrency markets. Investors are clearly gearing up for a tumultuous period but remain optimistic about the longer-term prospects for Bitcoin and other cryptocurrencies.
