US Bitcoin ETFs Face $541M Outflows Amid Election Anxiety

Bitcoin exchange-traded funds (ETFs) in the United States faced significant outflows as the nation approached a crucial presidential election. This event marked the second-largest outflow day on record for these financial products.

On November 4, just a day before U.S. voters cast their ballots, 11 spot Bitcoin ETFs reported net withdrawals totaling $541.1 million, according to data from SoSo Value. The largest outflow day on record remains May 1, when these ETFs experienced $563.7 million in withdrawals following a 10.7% decline in Bitcoin’s price over the previous week.

BlackRock’s IBIT Reports Positive Inflows

Among the various Bitcoin ETFs, BlackRock’s iShares Bitcoin Trust ETF (IBIT) stood out by reporting positive inflows, attracting $38.4 million. In contrast, several other Bitcoin ETFs encountered substantial outflows:

• Fidelity’s Wise Origin Bitcoin Fund (FBTC) saw $169.6 million withdrawn.
• The ARK 21Shares Bitcoin ETF (ARKB) experienced a loss of $138.3 million.
• Grayscale’s Bitcoin Trust (GBTC) recorded outflows of $63.7 million, while an additional $89.5 million exited its smaller fund.

The decline in ETF holdings reflects a broader market caution, as Bitcoin's price has dipped 4.6% over the past week and 1.7% in the last 24 hours, currently hovering around $68,000. This retreat by traders highlights concerns over market volatility in light of the upcoming election, with Bitcoin prices being sensitive to political developments.

Recent polling indicates a tight race between Kamala Harris and Donald Trump, with Harris holding a slight lead of 1.2 points as of November 4, according to FiveThirtyEight. On the crypto betting platform Polymarket, Trump’s odds have fluctuated significantly, dropping from 67% on October 30 to a low of 53.8% by November 3, before rebounding to just above 59%.

Analysts suggest that Trump's pro-crypto stance has increased his appeal among crypto investors, with speculation that a victory for him could potentially drive Bitcoin prices to $100,000. CoinShares’ head of research, James Butterfill, noted that the previous week’s inflows of $2.2 billion were partly driven by optimism surrounding a Republican win. He remarked, “As polls have turned, we saw minor outflows on Friday, highlighting how sensitive Bitcoin is to the U.S. elections at present.”

Digital Asset Products See Record Inflows of $2.2 Billion

In a related development, digital asset investment products experienced a remarkable surge last week, attracting inflows of $2.2 billion. This influx brings the total year-to-date inflows to a historic $29.2 billion. The impressive growth has pushed total assets under management (AuM) to over $100 billion for only the second time in history, reaching $102 billion—similar to levels observed in early June 2024.

Bitcoin was the primary beneficiary of this influx, absorbing the entire $2.2 billion in inflows, while short-Bitcoin products attracted an additional $8.9 million. In comparison, Ethereum saw only $9.5 million in inflows, with Solana gaining $5.7 million, while other altcoins like Polkadot and Arbitrum recorded minor inflows.

The U.S. market led the inflows with the full $2.2 billion, while Germany recorded modest inflows of $5.1 million.