The cryptocurrency investment frenzy sweeps the US stock market! Bitcoin and Ethereum ETF inflows hit new highs
Cryptocurrency investment has surged in the U.S. stock market, particularly with record inflows into Bitcoin and Ethereum ETFs. Since Trump won the presidential election, the market capitalization of cryptocurrencies has increased by over $1 trillion, with expectations that U.S. regulation will become more favorable. In November, inflows into Bitcoin ETFs and Ethereum ETFs reached $6.5 billion and $1.1 billion, respectively, indicating strong investor interest in cryptocurrencies. Although the market has not yet seen the irrational exuberance of the pandemic period, investment activity continues to grow
According to the Zhitong Finance APP, in the U.S. stock market, exchange-traded funds (ETFs) directly investing in Bitcoin and Ethereum (i.e., Bitcoin ETF and Ethereum ETF) are experiencing unprecedented investment demand. This is attributed to Donald Trump, the elected president of the United States, who is set to return to the White House in January, promising to lift regulatory shackles on the cryptocurrency industry and to make the U.S. the "cryptocurrency capital" and a "Bitcoin superpower."
According to the latest capital inflow data compiled by institutions, all Bitcoin ETFs and Ethereum ETFs listed on the U.S. stock market set monthly net inflow historical records in November, amounting to $6.5 billion and $1.1 billion, respectively. Among them, the inflow scale of Bitcoin ETFs broke the previous record of $6 billion set in February, while the daily subscription volume of Ethereum ETFs reached a single-day historical high last Friday.
Ethereum is the largest cryptocurrency by market capitalization after Bitcoin, and the strong investment interest in Ethereum globally indicates that speculation and profit-seeking interest in cryptocurrencies are expanding following Trump's victory in the U.S. election on November 5.
However, from certain indicators, the calls for exposure to cryptocurrency assets like Bitcoin have not yet returned to the irrational exuberance seen during the pandemic bubble, at least among retail investors, which also suggests that the investment frenzy in the cryptocurrency market may continue.
"We observe a trend in the cryptocurrency market where Bitcoin initially drives the price movements of popular cryptocurrencies, but as the tide rises, it lifts all cryptocurrencies," said Caroline Bowler, CEO of BTC Markets Pty. She believes that based on the inflow of investor funds into digital asset exchanges, market investment activity has not yet peaked.
On November 29, nine Ethereum ETFs achieved a net inflow of up to $333 million, thanks to the issuance of the iShares Ethereum ETF by the world's largest asset management firm BlackRock and the Fidelity Ethereum ETF issued by another asset management giant, Fidelity Investments. Based on ETF fund size, BlackRock, Fidelity Investments, and cryptocurrency-focused investment firm Grayscale Investments LLC are the largest ETF issuers for the two major cryptocurrency assets, Bitcoin and Ethereum.
Last month, Bitcoin first approached the epic milestone of $100,000. As of Monday morning, Bitcoin's trading price hovered around $97,880, while Ethereum's trading price was around $3,730. Since Trump's victory, Ethereum's price performance has outpaced Bitcoin, but it has not yet reached a historical high like Bitcoin Due to market expectations that Trump will revoke the U.S. Securities and Exchange Commission (SEC)'s regulatory crackdown on the world's fourth-largest digital asset, the XRP token, the trading price of XRP has seen a parabolic surge. Some investment firms are seeking to launch an XRP exchange-traded fund (i.e., seeking to launch an XRP ETF).
Recently, Trump vowed to abolish the Biden administration's crackdown on digital assets and introduce more friendly regulatory policies. The Republican leader also supports the establishment of a strategic Bitcoin reserve in the U.S. Trump has previously been skeptical of cryptocurrencies, but as the industry raises funds for campaign activities to further its interests, coupled with his recognition of the decentralized trading value of cryptocurrencies and the positive significance of promoting financial technology development, he has quickly changed his attitude towards cryptocurrencies.
More significantly, media reports have revealed that Trump's core team plans to establish a special senior position in the White House responsible for cryptocurrency policy for the first time. According to U.S. political circles, whoever holds this position will be the "cryptocurrency czar," the highest-level official overseeing federal government-related policies and industry regulation.
From the latest news, the Trump-led U.S. federal government may plan to elevate the cryptocurrency industry to an unprecedented height. If the news about establishing a "cryptocurrency czar" is true, it would be the first position in the White House specifically responsible for cryptocurrencies, highlighting the new U.S. government's emphasis on the development of the emerging cryptocurrency industry.
In addition, the outgoing SEC Chairman Gary Gensler has always been critical of cryptocurrencies, and Trump may appoint a financial industry professional who supports cryptocurrencies to succeed Gensler at the SEC, paving the way for the issuance of other cryptocurrency ETFs.
Statistics from CoinGecko show that since Trump was elected President of the United States, the overall market capitalization of the cryptocurrency market has significantly increased by about $1.2 trillion. In 2022, digital assets like Bitcoin suffered a catastrophe, exposing some sharp high-risk practices and fraudulent activities, leading to a series of major negative events, such as the collapse of the FTX exchange empire under Sam Bankman Fried. However, for now, market participants' fervent enthusiasm for the new U.S. government's support for cryptocurrency development under Trump's leadership overshadows memories of these risks