Key Takeaways:
Wall Street heavyweight BlackRock’s spot Bitcoin exchange-traded fund (ETF) has seen upward of $1 billion in trading volume in the first minutes of trading after Donald Trump was certified as the winner of the US Presidential election.
Since their launch in January 2024, Bitcoin ETFs have been one of the main drivers of institutional interest in BTC. These investment products backed by the original cryptocurrency have outperformed almost every single ETF in recent history. Bitcoin spot ETFs accounted for six of the top 10 most successful ETF launches this year.
BTC and Bitcoin ETFs Break Records After Trump’s Victory in US Elections
According to Bloomberg’s senior ETF analyst Eric Balchunas, IBIT’s $1 billion worth of trading volume in the first 20 minutes of trading on November 5 is “about what it does in a full day”. He also noted that other spot Bitcoin ETFs witnessed “crazy” volume after the Republican candidate secured the elections to become the country’s 47th president.
What drove the explosive volume for Bitcoin ETFs is the astounding price performance of BTC over the last few days. The flagship cryptocurrency saw its price surge around 7.65% in 24 hours to trade at $74,000. On November 5, Bitcoin set a new all-time high of $75,005 as early polling showed an increased probability of Trump returning to the White House. Once he was declared the winner, Bitcoin recorded a fresh ATH of $75,392.
One main reason why Bitcoin’s price is surging is due to Trump’s perception about the apex cryptocurrency shifting from a position of skepticism to that of strong advocacy as he pledged to support the sector and make the country the “crypto capital of the world”. Meanwhile, his opponent Kamala Harris has been tight-lipped on the matter.
Under President Biden and Vice President Kamala Harris’ administration, the US Securities and Exchange Commission (SEC) has taken an aggressive regulatory stance against crypto firms, bringing more than 100 enforcement actions against industry players.
Trump Promises to Sack SEC Chair Gary Gensler
While speaking at a recent Bitcoin conference, Trump suggested that he would sack the current chairman of the SEC, Gary Gensler, who has been leading the crackdown on the industry and has been accused by companies of “regulation by enforcement”.
The President-elect also proposed the idea of creating a strategic Bitcoin reserve for the country, suggesting that the US government could soon be holding BTC in its treasury. The move could boost the cryptocurrency’s value, enabling the industry to thrive. Since the supply of Bitcoin is limited to 21 million, its price will soar if demand increases or remains stagnant.
It is also worth noting that Bitcoin prices have rallied following the US Presidential election as the event falls during the years in which the apex cryptocurrency undergoes its reward-halving procedure. During the halving, the Bitcoin network will slash the rewards miners receive per block created in half, effectively reducing the amount of BTC that enters the market.
During the past election years, Bitcoin’s 90-day returns were 87% in 2012, 44% in 2016, and 145% in 2020.
ETF Issuers Are Optimistic About Gaining Approval for Crypto Indexes
This year, several asset managers have submitted a flurry of regulatory filings to list ETFs backed by altcoins, including Solana (SOL), Ripple (XRP), and Litecoin (LTC), among others. ETF issuers are also awaiting approval for several crypto index ETFs, which are designed to hold a diverse portfolio of crypto assets.
In July, securities exchange Cboe asked regulators permission to list VanEck and 21Shares’ spot Solana ETF, and in October, issuers Canary Capital and Bitwise both filed for a proposed spot Ripple ETF. Canary also filed to register a spot Litecoin ETF last month.
Speaking at the Plan B Forum conference in Lugano, Switzerland, Eric Balchunas said these alternative crypto exchange-traded funds planned for the US market are “call options on a Trump victory”. The Bloomberg ETF analyst also added that the president-elect will put in place a more libertarian chair at the head of the Securities and Exchange Commission.
Former president Donald Trump won the November 5 election with more than 270 Electoral College and a large majority of the popular votes. Although some votes are still being counted, the election has already been called in his favor.
At the time of writing, Bitcoin (BTC) is trading at $74,866 – up 0.65% in the last 24 hours.
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