Bitcoin ETFs Suffer Record Outflows Ahead of US Election, Traders on Edge

Bitcoin ETFs Suffer Record Outflows Ahead of US Election, Traders on EdgeOn the day before the official start of voting in the US presidential election, the US Bitcoin ETF market witnessed dramatic changes, with record daily net outflows as traders prepare for potential market volatility on Election Day. Bloomberg statistics show that 12 Bitcoin ETFs managed by companies like BlackRock and Fidelity experienced a staggering $579

Bitcoin ETFs Suffer Record Outflows Ahead of US Election, Traders on Edge

On the day before the official start of voting in the US presidential election, the US Bitcoin ETF market witnessed dramatic changes, with record daily net outflows as traders prepare for potential market volatility on Election Day. Bloomberg statistics show that 12 Bitcoin ETFs managed by companies like BlackRock and Fidelity experienced a staggering $579.5 million in net outflows on Monday, marking a historical high. This move indicates that investors are anxious about the upcoming election results and are seeking to hedge their positions before the results are revealed.

The pricing of CME Bitcoin options suggests that Bitcoin's 30-day implied volatility has reached its highest level since August (when the Japanese stock market crash on "Black Monday" triggered a market plunge). Option pricing also implies that Bitcoin is expected to fluctuate by around 8% in the two days following the vote, four times the normal level. This further supports the market's extreme sensitivity to the election outcome and investors' high expectations for future market volatility.

Caroline Mauron, co-founder of OrbitMarkets, a digital currency derivatives liquidity provider, stated that the market has not yet priced in volatility after November 7, indicating an expectation of quick election results. Given the close polls between the two candidates, this might be an optimistic prediction.

Bitcoin's price has surged nearly 60% this year, outperforming assets like stocks and gold. In March, driven by inflows into US ETFs, Bitcoin reached a historical high of $73,798. However, as the election approaches, market sentiment has become more cautious, with investors seeking safer investment options.

On the campaign trail, Trump has openly supported cryptocurrencies, while Harris has taken a more cautious approach, promising a regulatory framework for digital assets. Both stances have fueled optimism within the cryptocurrency community, contrasting with Biden's stance of cracking down on the industry. Trump's embrace of the industry has made Bitcoin one of Wall Street's favored "Trump trades."

Despite this, many analysts believe that Bitcoin's long-term value remains dependent on its technological advantages and application potential rather than political factors. Nonetheless, it's undeniable that the election results will have a significant impact on the cryptocurrency market, especially on Bitcoin's price trajectory.

The market widely expects the US election results to have a major impact on global markets, and Bitcoin, being a highly volatile asset, will naturally be affected. In the short term, market volatility will remain high, and investors need to exercise caution. However, in the long run, Bitcoin's value as a digital currency still depends on its technological advantages and application potential, and it won't lose its value because of short-term fluctuations.