Bitcoin ETFs See Major Daily Outflows Ahead of Election Day

On the eve of a major election, U.S.-based Bitcoin exchange-traded funds (ETFs) recorded their second-largest daily outflows, marking a substantial reduction in holdings as investors brace for potential market shifts.

Data from CoinGlass shows that on Monday, Nov. 4, a net outflow of $541.1 million was reported across 11 spot Bitcoin ETFs, with BlackRock’s iShares Bitcoin Trust ETF (IBIT) standing out as the only fund to record inflows, pulling in $38.4 million. This follows the largest single-day outflow recorded on May 1, when Bitcoin ETFs saw a total withdrawal of $563.7 million after Bitcoin experienced a sharp decline.

Investor sentiment has been increasingly cautious, with Bitcoin shedding 4.6% over the past week, including a 1.7% drop in the last 24 hours, to settle near $68,000. This appears to reflect reduced exposure among Bitcoin traders ahead of the U.S. election scheduled for Tuesday, Nov. 5.

The largest outflow on Nov. 4 was from the Fidelity Wise Origin Bitcoin Fund, which lost $169.6 million, while the ARK 21Shares Bitcoin ETF followed closely with $138.3 million in outflows. Grayscale’s two Bitcoin-focused funds also saw considerable movement, totaling $153.2 million in net outflows. Of this, the Grayscale Bitcoin Trust (GBTC) alone recorded $63.7 million in withdrawals, while its mini version had $89.5 million, ranking them the fifth and third largest fund outflows of the day.

Earlier, the week ending on Nov. 1 had generally positive inflows into U.S. Bitcoin ETFs, totaling $2.2 billion, though it ended on a down note with $55 million in outflows on Friday.

James Butterfill, head of research at CoinShares, explained that early-week inflows were likely fueled by enthusiasm around a possible Republican win. However, as polls tightened, minor outflows appeared, underscoring Bitcoin’s sensitivity to the U.S. political climate.

Polls indicate a close race between Kamala Harris and Donald Trump, with Harris leading by a narrow 1.2-point margin as of Nov. 4, according to FiveThirtyEight. Betting markets also reflected shifting sentiment, with Trump’s odds dipping from 67% on Oct. 30 to 53.8% on Nov. 3, although they bounced back slightly to 59%.

Trump’s pro-crypto stance has made him popular within the digital asset community, with some speculating that a second term could potentially drive Bitcoin to new highs, possibly reaching $100,000.

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