The cryptocurrency market capitalization has hit a five-month high, exceeding $2.47 trillion. This surge is attributed to the recent US election results and increased activity around cryptocurrency exchange-traded funds (ETFs).
Significant Gains in the Cryptocurrency Market
In the past 24 hours, the total market capitalization increased by more than $231 billion. Bitcoin [BTC] and most altcoins moved higher, pushing the market cap to its highest levels since June. This was accompanied by rising volatility, resulting in massive liquidations in the derivatives market. Over $380 million was liquidated in the past day, with short sellers bearing the brunt of the losses.
US Election Results Fuel Cryptocurrency Gains
The US Presidential election has been a major driver of these gains. Pro-crypto candidate Donald Trump won the election, pledging various benefits to the US crypto community, including the establishment of a Bitcoin strategic reserve and firing the Chair of the US Securities and Exchange Commission (SEC), Gary Gensler. This has renewed investor confidence, as evidenced by the crypto fear and greed index rising to 77, indicating 'extreme greed'.
ETF Activity and Its Impact
There was a surge in activity around US-listed crypto exchange-traded funds (ETFs) on election day. Data shows that total volumes traded for Bitcoin ETFs hit $6.07 billion, the highest level since March. This increase in ETF inflows drives demand for the underlying product. This bullish wave has also positively affected crypto-related stocks. On Wednesday, Coinbase (COIN) gained by 31% to $254, its highest level since July. Other crypto stocks such as MicroStrategy and Jack Dorsey's Block also saw significant gains.
The increase in cryptocurrency market capitalization is a result of the recent US election and active investments in crypto ETFs. This phenomenon confirms sustained interest and positive investor sentiment towards digital assets.
