This week ended on a high note for the crypto market with a series of favorable news. Bitcoin ETFs recorded $1.38 billion in net inflows on Thursday, a day after Trump's US Presidential election victory, and Bitcoin continues to break its highs.
ETF Inflows and Fed Rate Cut Impact on Bitcoin
BlackRock’s IBIT led the pack with over $1.1 billion in net inflows. Cumulative net inflows across all products crossed $25 billion, with none of the twelve ETFs showing outflows. The anticipated 25 bps Fed rate cut also played a role, boosting Bitcoin to $77,000. This cut typically supports risk assets like Bitcoin by increasing liquidity and weakening the dollar.
Investors' Response to Trump's Victory
Ether ETFs also logged $78 million in net inflows following Trump's win, with ETH rising over 10%. Expectations of pro-crypto policies and deregulation under Trump's regime have boosted investor confidence. However, it was noted that investors are beginning to pull back from some 'Trump trades'.
Sustained Growth in Bitcoin
This sustained bullishness in Bitcoin could create a 'feedback loop', as rising ETF inflows boost BTC prices, attracting more retail capital and systematic fund buying as volatility declines. This trend may continue amid expected regulatory changes fostering the growth of digital assets.
Donald Trump's US presidential victory has sparked a remarkable surge in the cryptocurrency market. Bitcoin hit a new all-time high, while Ethereum and Solana reached new peaks. This surge reflects optimism around Trump's pro-crypto stance and the anticipation of a more favorable regulatory environment for digital assets.
