Bitcoin-focused exchange-traded funds (ETFs) in the US saw significant outflows on Monday (November 4) as cryptocurrency market participants prepared for election-related uncertainty.
In total, a group of 12 American Bitcoin ETFs tracked by Bloomberg saw outflows of US$579.5 million that day. According to the news outlet, that’s the highest daily net outflow number seen to date.
Bitcoin-mining stocks also saw losses last week, indicating broader market stress within the sector.
MARA Holdings (NASDAQ:MARA), the largest Bitcoin-mining firm by market cap, fell around 9 percent last week, while Core Scientific (NASDAQ:CORZ) sank about 5.5 percent. Meanwhile, Riot Platforms (NASDAQ:RIOT), was down just under 5.8 percent during the period, and CleanSpark (NASDAQ:CLSK) dropped more than 10 percent.
Shares of Coinbase Global (NASDAQ:COIN), a company that runs a cryptocurrency exchange platform, dropped 14.28 percent last week, while MicroStrategy (NASDAQ:MSTR), a Bitcoin development company co-founded by entrepreneur and Bitcoin advocate Michael Saylor, saw a decrease of around 6 percent during the same timeframe.
These declines came even as the price of Bitcoin rose. The popular cryptocurrency was up about 1.5 percent last week, and jumped higher early in the trading day on Tuesday (November 5), breaching the US$70,000 level.
The disparity between Bitcoin’s performance and Bitcoin-related companies suggests that while the cryptocurrency has managed to maintain some stability, companies are reacting more sharply to market turmoil.
How will the US election affect crypto?
The current political climate in the US has created a complex landscape for digital asset traders.
As the race between Republican Donald Trump and Democrat Kamala Harris remains competitive, market participants are adjusting their strategies in anticipation of potential shifts in regulatory frameworks.
Trump’s campaign has been characterized by a supportive stance toward cryptocurrencies, while Harris has expressed her intention to create a more structured regulatory environment for digital assets.
But while the election may create short-term volatility, experts believe it will take time for its full impact to emerge.
“The biggest changes for mid-longer term crypto policy and direction won’t be seen until after the week has passed and seats around the president are filled or maintained,” Paul Howard, senior director at Wincent, told Bloomberg.
As voters head to the polls, analysts continue to monitor the potential impact of the election on regulatory approaches to cryptocurrencies, as well as the broader economic implications of the election outcome.
Click here for more on what a Trump or Harris victory could mean for the crypto industry.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.