On Tuesday, BlackRock’s IBIT experienced a single-day inflow of over $629 million, as the asset approached its lifetime highs in anticipation of the upcoming U.S. elections.
SoSoValue data reveals that the top six bitcoin investment trusts by inflow amount were as follows: IBIT (BlackRock), FBTC (Fidelity), BITB (Bitwise), BTC (Grayscale), HODL (VanEck), and ARKB (Ark).
The demand for exchange-traded funds (ETFs) was bolstered by the fact that bitcoin fell just short of its lifetime highs late Tuesday, a development that traders widely regard as a sign of volatility in the near term. This was before the U.S. elections next week. Last week, there was a significant increase in demand for options wagers in the $80,000 price range, regardless of whether a Democrat or Republican wins the election in November.
BTC experienced a 3% increase on Tuesday, thereby extending its seven-day gains to 7.7% and facilitating a market upward movement.
Eric Balchunas, an analyst at Bloomberg ETFs, anticipates that the inflow figures will increase in the near future due to investor “FOMO,” or the Fear of Missing Out on a trade.
Balchunas stated on X that $IBIT traded $3.3 billion today, the highest volume in six months. This is somewhat unusual, as Bitcoin experienced a 4% increase, and ETF volume typically increases during periods of crisis or downturn. “On occasion, volume may experience a surge in response to a FOMO-induced hysteria, as was the case with $ARKK in 2020. I anticipate that this is the case, as the price has experienced a recent increase. Consequently, expect additional substantial inflows this week.”
A high level of inflows into an exchange-traded fund (ETF) is indicative of investor confidence or interest in the underlying asset. Although inflows may not directly result in an increase in the value of the ETF’s underlying assets, the buying pressure can result in a price increase in the near term as a result of supply and demand dynamics and increased sentiment among traders.
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