Bitcoin ETFs saw $541M in outflows ahead of the U.S. election, highlighting market caution amid political uncertainty and volatility - IcoHolder.

As the U.S. presidential election looms, Bitcoin exchange-traded funds (ETFs) have faced significant withdrawals, marking a turbulent period for cryptocurrency investors. On November 4, the day before millions of Americans head to the polls, 11 spot Bitcoin ETFs experienced net outflows totaling a staggering $541.1 million, according to data from SoSo Value. This event stands as the second-largest outflow day on record for these funds, underscoring the cautious sentiment permeating the market.

The record for the largest outflow day remains from May 1, when ETFs saw $563.7 million withdrawn following a sharp 10.7% drop in Bitcoin’s price within a week. Currently, Bitcoin is trading around $68,000, having decreased 4.6% over the past week and 1.7% in the last 24 hours, reflecting traders' unease amidst political uncertainties.

While most funds struggled with outflows, BlackRock’s iShares Bitcoin Trust ETF (IBIT) emerged as a standout, reporting positive inflows of $38.4 million. In contrast, Fidelity’s Wise Origin Bitcoin Fund (FBTC) suffered the most, with $169.6 million pulled out, followed closely by the ARK 21Shares Bitcoin ETF (ARKB), which saw a withdrawal of $138.3 million. Additionally, Grayscale’s Bitcoin Trust (GBTC) experienced outflows of $63.7 million, with another $89.5 million exiting its smaller counterpart.

Market analysts attribute this volatility to the upcoming election, particularly as Bitcoin's price remains sensitive to political dynamics. Recent polling indicates a tight race between Vice President Kamala Harris and former President Donald Trump, with Harris holding a narrow lead of 1.2 points as of November 4, according to FiveThirtyEight.

Speculation regarding Trump's pro-crypto stance has heightened his appeal among crypto investors, with many predicting that a victory for him could push Bitcoin prices toward the coveted $100,000 mark. James Butterfill, head of research at CoinShares, commented on the recent market activity, noting that inflows of $2.2 billion in the previous week were partly driven by optimism surrounding a Republican win.

Despite the significant outflows in the lead-up to the election, digital asset investment products as a whole witnessed record inflows of $2.2 billion last week, bringing total year-to-date inflows to an unprecedented $29.2 billion. This surge has propelled total assets under management (AuM) in the sector to over $100 billion, reaching a notable $102 billion—marking only the second occurrence of this milestone.

Bitcoin was the primary recipient of these inflows, absorbing the entire $2.2 billion, while short-Bitcoin products attracted an additional $8.9 million. Ethereum lagged behind, garnering just $9.5 million in inflows, while Solana saw $5.7 million. The U.S. market dominated the inflow landscape, accounting for the full $2.2 billion, with Germany recording more modest inflows of $5.1 million.

As election day approaches, investors are closely monitoring the fluctuating political landscape, which could significantly impact the cryptocurrency market in the near future.