(Dec 2): US exchange-traded funds (ETFs) investing directly in bitcoin and Ether are enjoying unprecedented demand, buoyed by President-elect Donald Trump’s pledge to unfetter the crypto industry from regulatory shackles.
The groups of ETFs posted record monthly net inflows in November at US$6.5 billion or RM29.0 billion (bitcoin) and US$1.1 billion (Ether), according to data compiled by Bloomberg. Last Friday’s daily Ether ETF subscriptions also hit an all-time peak.
The interest in Ether, the largest token after bitcoin, points to widening speculative appetite for crypto following Trump’s US election victory on Nov 5. By some metrics, the clamour for exposure to digital assets has yet to reprise the mania of a pandemic-era bubble, at least among retail investors.
“We see a trend in crypto markets where bitcoin initially drives price action, but the rising tide lifts all boats,” said Caroline Bowler, the chief executive officer of BTC Markets Pty Ltd. She argued that activity isn’t peaking yet, based on the flow of investor money onto digital-asset exchanges.
The nine Ether ETFs achieved a net inflow of US$333 million on Nov 29, powered by BlackRock Inc’s iShares Ethereum Trust and Fidelity Investments’ Ethereum Fund. BlackRock, Fidelity and crypto specialist Grayscale Investments LLC were the biggest issuers of digital-asset portfolios by fund size.
Bitcoin, which last month came close to US$100,000 for the first time, traded at US$96,326 as of 6.05am on Monday in London. Ether changed hands at US$3,672. Ether has outperformed bitcoin since Trump’s win, but is yet to set new highs.
In the options market, about 77% of Ether open interest on Derive.xyz comprises bullish wagers, versus 66% for bitcoin, said the trading platform’s founder Nick Forster. Open interest refers to outstanding options contracts for an asset.
The XRP token extended a parabolic surge on expectations that Trump will undo a Securities and Exchange Commission crackdown that had weighed on the fourth-largest digital asset. Some investment firms are seeking to start XRP ETFs.
Trump has vowed to scrap a Biden administration digital-asset clampdown and put in place friendly regulators. The Republican also backs the creation of a US strategic bitcoin stockpile. Trump used to be a crypto sceptic but pivoted as the sector unleashed an election campaign war chest to further its interests.
The crypto market has jumped by about US$1.2 trillion since Trump became the president-elect, CoinGecko data showed. The rally is dulling memories of a painful bust that exposed fraud and risky practices at the heart of the 2021 boom.
Uploaded by Tham Yek Lee