Bitcoin ETF Inflows Hit Record High as Election Speculation Heats Up

US Bitcoin ETFs recorded their highest daily inflow since their inception, amassing $870 million on Tuesday. This surge in investment coincides with Bitcoin inching closer to its all-time high of $73,700

US Bitcoin exchange-traded funds (ETFs) saw their highest daily inflows since their launch, raking in a substantial $870 million on Tuesday, as per Bloomberg data. This surge in investment corresponds with Bitcoin’s ascent towards its all-time high of $73,700, attained in March.

Apparent enthusiasm among investors is fueled by speculation regarding a potential victory by Republican candidate Donald Trump over Vice President Kamala Harris. Many anticipate that such an outcome would foster a favorable climate for the digital asset ecosystem, ultimately benefiting crypto prices.

The subscriptions on Tuesday pushed the year-to-date inflows for the group of 12 Bitcoin ETFs to over $23 billion, according to Bloomberg. Analysts attribute the growing demand for Bitcoin exposure to Trump’s improving odds in election betting markets.

However, while Trump leads in prediction markets, polls indicate a close race against Vice President Harris, who has pledged support for a regulatory framework for the cryptocurrency industry.

Despite this, Trump's stance on crypto seems to align more closely with the community's sentiments.

Adding to the speculative fervor, Bitcoin options markets suggest a one-third probability of a price fluctuation exceeding 10% on election day, November 5. According to Nick Forster, founder of crypto trading platform Derive.xyz, such volatility often prompts traders to anticipate potential market movements, which contributes to the demand for Bitcoin ETFs and the current price rally.

ETF expert Eric Balchunas also commented on the bullish sentiment, stating that these funds are on track to reach 1 million BTC in holdings as early as today. In a recent social media post, Balchunas noted that US spot ETFs could surpass 1 million BTC by next Wednesday, and the funds’ holdings might outpace Bitcoin’s mysterious creator, Satoshi Nakamoto's stash by mid-December, with the funds adding roughly 17,000 BTC each week.

Yet, after Tuesday's performance, Balchunas remarked, “We’re going to need to move up our predictions,” highlighting that Bitcoin ETFs had acquired over 12,000 coins in just one day, now holding a total of 996,000 BTC. He expressed optimism about breaching the 1 million mark soon, given the “extraordinary” trading volume from the previous day, which is likely to translate into significant inflows.

Balchunas also cautioned about the fluidity of market conditions, adding, “Anything can happen,” and highlighting the potential for a sudden selloff that could delay reaching the 1 million BTC milestone.

On the other hand, if Bitcoin prices continue to rise and a Trump victory sparks market enthusiasm, fear of missing out (FOMO) could drive even more rapid accumulation.

At the latest update, Bitcoin's price showed an upward trend, trading at $72,360, up over 8% in the past 7 days.