As Bitcoin Hits New Heights, Will ETFs Follow?
Well, it seems the cryptoverse has had quite the glow-up since Donald Trump resumed his triumph over the electoral cosmos! Just when you thought crypto was on life support post-2022—thanks to the epic flop of FTX and the spectacularly messy fall of Sam Bankman-Fried—it turns out all it needed was a sprinkle of political enthusiasm and a good old rallying cry to come swinging back. Who knew the word ‘Trump’ would no longer make you think of orangutans grappling for a comb?
Now, Trump, who previously branded crypto a “scam” (a bit rich coming from someone with a history of dodgy dealings), has promised to usher in a new era for Bitcoin. We’re talking national reserves, the government looking after your precious digital coins like they’re a pack of puppies, and a proper ban on any pesky regulatory bother, which would mean saying goodbye to Gary Gensler. Let’s face it; it’s like saying goodbye to the school principal who keeps telling you to stop throwing paper airplanes in class!
And what about that 30% surge in Bitcoin? Oh yes, you heard me right! Bitcoin has skyrocketed to a jaw-dropping $89,968. If you had Bitcoin in your ‘fun money’ portfolio, you might just be thinking about how soon you can quit your job and start a beach resort on a private island. This time around, it’s not just the day traders; institutional investors are flushing the Spot Bitcoin ETFs with cash. We’re talking over $4.22 billion in inflows! BlackRock’s IBIT fund, that cash machine of a product, has pulled in $778.27 million alone—making you wonder what kind of magic beans are in that fund! One can only imagine the boardroom discussions that led to that decision—perhaps they were channeling their inner Wizard of Oz.
EXANTE’s Professional Investors knew this was not the time to panic sell, despite the occasional market hiccup. They held steady while their portfolios transformed into those magical growing beanstalks, increasing their Spot Bitcoin ETF holdings like the rest of us hoarding toilet paper during a pandemic. While the Fed fiddled with interest rates, these savvy investors were calculating their moves like chess grandmasters prioritizing that deadly Queen.
Ethereum: The Little Cousin Getting a Bit More Attention
Now, let’s not forget Ethereum, which has also joined the party. Ah yes, Ethereum’s striking gold with $295.5 million pouring in, which just goes to show that everyone likes a bit of diversity in their crypto portfolio. BlackRock’s ETHA and Fidelity’s FETH have both hit the jackpot, proving that Ethereum can finally rise from the shadows of Bitcoin like a Pokémon evolving into something much cooler (and no, I’m not talking about Pikachu). But with the SEC playing hard-to-get with ETF approvals, it’s like watching your crush leave the door slightly ajar while you ponder if you should go for it or just walk away.
Will the Recovery Continue for Cryptocurrency ETFs?
Emotionally, the market seems a bit like a rollercoaster ride—mild fear followed by euphoric peaks. So, the big question remains: will cryptocurrencies keep their dazzling dance moves or will they face the dreaded market hangover? With Trump’s resilient promises to transform the U.S. into the grand “crypto capital,” suddenly it seems like regulations are looking more like guidelines, and that might just be what the doctor ordered for those holding onto their crypto dreams.
With a majestic Bitcoin market cap of $1.78 trillion, suddenly silver’s got nothing on the shiny gold (or would we say Bitcoin) that has taken everyone by storm. The percentage of Bitcoin ETF and Ethereum ETF assets is likely to grow further, especially as couch-surfers seeking income are drawn to these promising sectors. So, whether you’re a Bitcoin enthusiast or someone who just Googles what a blockchain is, these developments are definitely worth keeping your eye on.
So there we go, folks! Whether you’re a seasoned investor clutching your wallet or a newbie dipping your toes into the crypto pond, one thing’s for sure: keep your eyes open and your wallets handy. In this glittering world of cryptocurrencies, where every day feels like an episode of ‘Game of Thrones’—minus the dragons, of course—make sure you’re ready for the unexpected!
Just a quick caveat: while this dazzling financial rollercoaster continues, remember that investing in cryptocurrencies can be riskier than jumping off a cliff with a parachute that you just found in your attic. So, tread wisely! And while you’re at it, maybe avoid taking life advice from that guy you met in the pub with the ‘Bitcoin is king’ t-shirt.
As Bitcoin Hits New Heights, Will ETFs Follow?
The cryptocurrency landscape has undergone a remarkable resurgence following the election of crypto-enthusiast Donald Trump as President of the United States. Notably, Trump, who previously characterized cryptocurrency as a potential scam, shifted his stance earlier this year amid a significant recovery from the tumultuous events of 2022—including the catastrophic downfall of the FTX crypto exchange and the subsequent legal issues faced by its founder, Sam Bankman-Fried. Now, with a Republican majority in Congress, expectations are soaring that Trump will deliver on his ambitious commitments: establishing a national Bitcoin reserve, prohibiting the federal government from liquidating its Bitcoin assets, championing American Bitcoin mining initiatives, and alleviating regulatory hurdles for the crypto industry by potentially ousting Gary Gensler, the current chair of the Securities and Exchange Commission (SEC), who many perceive as an impediment to crypto expansion. As such, cryptocurrency holders are increasingly looking to Trump to position the US as the preeminent global hub for digital assets.
As a direct consequence of these optimistic projections, Bitcoin’s price has skyrocketed—gaining approximately 30% in value following Trump’s election victory and reaching an astonishing peak of $89,968 on Tuesday, according to comprehensive data from Bloomberg. Moreover, data from SoSoValue indicates that the twelve Spot Bitcoin ETFs have experienced consecutive net inflows over five days since the election, culminating in total inflows exceeding $4.22 billion. Institutional investors are showing heightened interest, with BlackRock’s IBIT fund leading the charge, attracting an impressive $778.27 million—pushing its total net inflows to a record $28.92 billion since its launch.
EXANTE’s Professional and Institutional clients have greatly benefitted from this explosive growth in Bitcoin. Despite a decline in mid-September following the Federal Reserve’s initial 50 basis point rate cut and surrounding uncertainties about the US labor market, these savvy investors not only held fast to their assets but also increased their Spot Bitcoin ETF holdings from 48.7% on August 18 to 51% by November 10, reflecting their confidence in the asset’s long-term potential.
Understanding the market dynamics, EXANTE’s Professional and Institutional clients were aware that the early September downturn was merely a fleeting setback. Their strategy of holding onto their investments has paid off, as their Bitcoin holdings surged, outpacing the global average recovery rate—climbing by 37.9% compared to just 15% for investors at large.
Moreover, it’s not just Bitcoin ETF investors who have profited from this optimistic market sentiment; Ethereum has also reaped the rewards. US Spot Ethereum ETFs witnessed the highest net inflow since their inception, amassing an unprecedented $295.5 million, with BlackRock’s ETHA and Fidelity’s FETH each collecting roughly $100 million, as demonstrated by SoSoValue’s data. This surge occurred despite the SEC’s decision to delay its verdict on the approval of Spot Ethereum ETFs, extending the review period to allow for further analysis and public input regarding compliance with Securities Exchange Act regulations. The regulatory body expressed concerns over the potential ramifications of ETFs on market manipulation, investor protection, and the integrity of trading systems under Section 6(b)(5) of the Act. Should the SEC ultimately approve these ETFs, the implications for both Ethereum and the broader cryptocurrency market could be significant, possibly instilling more legitimacy and stability within the fast-evolving sector.
Despite the uncertainty surrounding the SEC’s decisions, EXANTE’s Institutional Investor and Professional clients remain bullish on Ethereum. Their continued investment has led to more than a quarter of their ETH-linked products now held in Ethereum ETFs, more than doubling their allocations since the launch of these products in July. They have also boosted their overall Ethereum ETF holdings to exceed 20% of their total Ethereum assets, reflecting a strong belief in the future of digital currencies.
Owing to their resolute confidence in Ethereum, these investors have seen portfolio values appreciate at a rate significantly above the average, boasting gains of 23.7% compared to a more modest 20.9% for the general investor base by November 10.
Will the Recovery Continue for Cryptocurrency ETFs?
Before Donald Trump’s re-election, prevailing market sentiment around monetary policy significantly influenced cryptocurrency ETFs. While the Federal Reserve may moderate its approach to interest rate cuts, investors are left pondering whether cryptocurrencies will gain further appreciation, spurring demand for ETF-related assets, or if capital flow will shift toward equities in interest-sensitive sectors. With President-elect Trump and his Republican allies pledging to position the US as a “crypto capital” and advocating for a more accommodating regulatory landscape, the prospects for cryptocurrencies and their associated ETFs becoming integral components of the financial fabric have markedly improved. This week, Bitcoin’s market capitalization surged to an all-time high of $1.78 trillion, surpassing silver to become the eighth-largest asset by market cap globally. A substantial portion—$765.5 million—flowed into the iShares Bitcoin Trust (IBIT), while Fidelity’s FBTC garnered $135.1 million. This data underscores the escalating institutional appetite for Bitcoin. Furthermore, although daily trading volume for the twelve Spot Bitcoin ETFs tapered to $5.7 billion on Tuesday—down from $7.3 billion on Monday, marking the highest volume day in over seven months—it still represented a significant rise from the $2.8 billion recorded just last Friday, as per SoSoValue’s insights. It’s becoming increasingly evident that the proportion of Bitcoin and Ethereum ETFs may expand as institutional investors explore diverse income sources, particularly those bolstered by political commitments.
While every effort has been made to verify the accuracy of this information, EXT Ltd. (hereafter known as “EXANTE”) cannot accept any responsibility or liability for reliance by any person on this publication or any of the information, opinions, or conclusions contained in this publication. The findings and views expressed in this publication do not necessarily reflect the views of EXANTE. Any action taken upon the information contained in this publication is strictly at your own risk. EXANTE will not be liable for any loss or damage in connection with this publication.
This article is provided to you for informational purposes only and should not be considered as an offer or solicitation of an offer to buy or sell any investments or related services that may be mentioned herein.
His renewed interest in cryptocurrencies, particularly Bitcoin and Ethereum, could indeed signal a significant shift in the market landscape. The recent performance of Bitcoin, which witnessed a staggering 30% surge following Donald Trump’s election, illustrates the strong market sentiment surrounding digital assets. Investors are increasingly optimistic, driven by Trump’s commitments to enhance the regulatory environment for cryptocurrencies and to encourage innovations within the sector.
BlackRock’s IBIT fund and other Spot Bitcoin ETFs have capitalized on this momentum, attracting substantial inflows that reinforce institutional confidence in these assets. Similarly, Ethereum is gaining recognition, supported by strong inflows into its ETFs, even amidst regulatory uncertainties from the SEC. This could suggest that institutional investors are betting heavily on the long-term growth potential of both Bitcoin and Ethereum, anticipating a future where these assets play a more prominent role in investment portfolios.
However, the future remains uncertain. While the optimistic projections surrounding Trump’s presidency could potentially allow cryptocurrencies to flourish, the market is inherently volatile. Regulatory dynamics, investor sentiment, and broader economic conditions will all play crucial roles in determining the sustainability of this upward trajectory for cryptocurrency ETFs.
Ultimately, as the landscape evolves, both novice and seasoned investors must remain vigilant, continually assessing risks while navigating this complex and often unpredictable market. The lesson here is to stay diversified and informed, tracking developments that could impact your investment strategy in these rapidly changing times.
