Nov 1 (Reuters) – Investors have plowed money into funds tracking bitcoin, betting on a return of Republican Donald Trump to the White House even as they expect wild price swings in the world’s largest cryptocurrency during the election week, data showed.
Exchange-traded funds (ETF) tracking the spot price of bitcoin notched net inflows of $917.2 million on Wednesday, the biggest one-day increase since March, according to the Block, a data and news provider.
“The rising odds of a Republican sweep (has) fueled optimism for potential crypto-friendly legislation in Congress post-election,” analysts at Ryze Labs said.
Given the uncertainty, futures markets show investors are bracing for a volatile election week. Forward-implied volatility data from crypto derivatives exchange Deribit points to potential daily price swings of about 3.7% in bitcoin in either direction through Nov. 8.
Open interest on crypto derivatives exchanges – an indicator of market activity – hit an all-time high of $43.61 billion on Tuesday, as per data provider Coinglass.
The derivative activity, however, indicates traders expect volatility to subside and bitcoin to continue rising after the election week, said Luuk Strijers, CEO of Deribit.
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Reporting by Lisa Mattackal in Bengaluru; Editing by Maju Samuel
Our Standards: The Thomson Reuters Trust Principles.
