By Investors pulled a record amount from bitcoin exchange-traded funds to start the week as they prepared for volatility in the world’s largest crypto amid potential election uncertainty.
Bloomberg data shows that the 12 spot bitcoin ETFs in the market lost $579.5 million on Monday. That’s a record daily outflow for the funds since they first came to market in January.
Bitcoin has been volatile in the week leading up to the vote, edging toward all-time highs last week before pulling back again below $70,000. On Tuesday, the token was up by about 1.5%, trading at $69,553.
Vice President Kamala Harris and former President Donald Trump remain virtually tied in the final polls. Prediction markets, meanwhile, show Trump with a sizable lead, though betting odds have also swung toward Harris in recent days.
The uncertainty will likely stoke market volatility, experts say.
“We expect Monday and Tuesday to be quiet for markets, however, once we get the first drip feed of results on Tuesday night and Wednesday morning, expect fireworks,” Kathleen Brooks, research director at XTB, said in a note.
Other analysts also said they expect uncertainty to rattle markets, especially if votes have to be recounted in key states.
“The election looks significantly more of a contest than many had been expecting, which could provide a more protracted and volatile period ahead as we see potential recounts and challenges to potentially drag out this process,” Scope Markets’ Joshua Mahony said in a note.
Outcomes in swing states could be early indicators of a Trump or Harris victory, though. Troy Ludtka, Senior US Economist at SMBC, says a Trump win in key swing states like Georgia, North Carolina, and Pennsylvania could deliver an election outcome by midnight, or at least provide an early indication of who will win.
The crypto industry’s volatility comes as both candidates have targeted crypto voters.
Trump has been vocal about his support for the industry this year, billing himself as the “crypto president.” Harris has also courted crypto voters, marking a shift from President Joe Biden’s administration, which has pursued a stringent regulatory agenda led by the Securities and Exchange Commission.
