Key Insights:
Bitcoin ETFs saw a large outflow of $541 million after its price corrected to $69k, falling from $73.5k.
The redemptions were possibly due to election volatility, whale movements, and a fall in BTC's price.
This week, crypto prices are expected to remain volatile because of elections and the Fed's FOMC meeting.
However, Bitcoin's medium-term targets of $100k are intact and might only be delayed if election results are unfavorable.
In a shocking move, Bitcoin ETFs saw their second-worst outflows on Monday, 4 November 2024 of $541 million. The largest sell-off was on 1 May 2024, when Bitcoin ETFs saw an outflow of $563 million.
Bitcoin ETF Outflows on 4 November 2024
The most significant loser among the Bitcoin ETFs was Fidelity ($169.6 million), followed by Ark Invest ($138.3 million).
Interestingly, BlackRock’s Bitcoin ETF was a net gainer, with an inflow of $38.4 million. Grayscale was a net loser in the markets, losing even during the days when markets saw the highest inflows a week ago.
The outflows were likely triggered by a correction in Bitcoin prices from $73.5k to $69k.
Further, there have been large whale movements in Bitcoins, led by Mt. Gox, which moved $2.2 billion on Monday alone. The defunct exchange aims to repay all of its customers now, more than 10 years after it was hacked.
Mt.Gox Moves $2.2 Billion BTC
Another core reason that may have triggered those outflows could be the US elections. Investors may have withdrawn their investments so that any election-related volatility has minimal impact on their portfolio.
These outflows were much less than the inflows a few days ago, when Bitcoin ETFs saw $800 million in inflows for two consecutive days on 30 and 31 October.
Bitcoin has seen wide adoption among several large hedge funds, pension funds, and other wealth management funds. A report by PwC, one of the four largest accounting management institutions, showed that almost 47% of fund houses worldwide are invested in cryptocurrencies, with around 65% of them considering either keeping their funds invested for the long term or increasing their investments even more.
Another report a while ago showed that crypto markets have been witnessing the highest user activity to date. The number of users interacting with crypto platforms rose to 200 million in October from 65 million in January 2024.
Both Bitcoin ETFs and crypto markets could see high volatility this week, as the US elections and the US Fed’s FOMC meeting are scheduled for the next three days.
The US elections will kick off on 5 November, with a fight between Trump-led Republicans and Harris-led Democrats. Both of them fighting neck to neck will increase market volatility. Despite Polymarket predicting a clear Trump win, the elections still depend on broader voter perceptions.
A Trump win would surge in crypto markets amid expectations of light regulations for crypto-native companies. However, a Harris win would signify the continuation of the current administration’s policies on crypto.
The FOMC meeting on 6 and 7 November will decide the next quantum of interest rate cut. Last time, on 18 September this year, the US Fed cut interest rates by 0.5% against expectations of 0.25%. This rate cut channeled a tremendous amount of liquidity into the markets.
If the next rate cut follows the previous one, it would send Bitcoin towards an ATH and help it cross $100k by 2025. However, if the rate cuts are less than 0.25%, it would mean a temporary correction, but the markets would remain bullish in the long term.
As Altcoins surge, the broader markets have been highly bullish in the last few months. This surge in Altcoins has earlier provided a clear indication of altcoin season, but lately, Bitcoin's dominance rose to a 3.5-year high, as BTC dominated 59% of the crypto market cap.
Now that more liquidity is expected to enter the markets, we might see an even larger surge in the altcoins throughout 2025.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.