US exchange-traded funds (ETFs) focused on Bitcoin and Ether have recorded remarkable inflows, reflecting heightened interest in cryptocurrency following President-elect Donald Trump’s victory and his promises to ease regulatory restrictions on the sector.
Unprecedented Demand for Crypto ETFs
In November, Bitcoin ETFs experienced net inflows of $6.5 billion, while Ether ETFs garnered $1.1 billion, according to Bloomberg data. This marks a record-breaking month for both asset categories. Additionally, Ether ETFs reached an all-time high for daily subscriptions last Friday, underscoring the growing appetite for the cryptocurrency market.
The surge in Ether demand, the second-largest digital asset after Bitcoin, highlights expanding investor interest in crypto. Despite this momentum, analysts suggest the speculative fervor among retail investors has yet to reach the levels seen during the pandemic-driven crypto bubble.
Caroline Bowler, CEO of BTC Markets Pty, commented on the trend, stating, “We see a trend in crypto markets where Bitcoin initially drives price action, but the rising tide lifts all boats.” She noted that the market has not yet reached its peak activity, as evidenced by the flow of funds into digital-asset exchanges.
Major Players and Market Dynamics
Prominent issuers such as BlackRock, Fidelity, and Grayscale are leading the charge in the digital asset ETF space. On November 29, Ether ETFs saw a net inflow of $333 million, largely driven by BlackRock’s iShares Ethereum Trust and Fidelity’s Ethereum Fund.
Bitcoin, which nearly breached the $100,000 mark in November, was trading at $96,326 early Monday in London, while Ether traded at $3,672. Despite Ether outperforming Bitcoin since Trump’s election, it has yet to reach new all-time highs.
The optimism extends to the options market, where 77% of Ether’s open interest on Derive.xyz comprises bullish positions, compared to 66% for Bitcoin, according to the trading platform’s founder, Nick Forster.
Regulatory Expectations Boost Market Sentiment
XRP, the fourth-largest cryptocurrency, also witnessed significant gains, fueled by speculation that Trump’s administration will roll back the SEC’s enforcement actions that had previously dampened its value. Some investment firms are now exploring the possibility of launching XRP ETFs.
Trump has pledged to dismantle the Biden administration’s regulatory clampdown on digital assets, appoint crypto-friendly regulators, and establish a US strategic Bitcoin reserve. His evolving stance, from skepticism to advocacy, has resonated with the sector, which heavily supported his campaign.
The cryptocurrency market has added approximately $1.2 trillion in value since Trump’s victory, according to data from CoinGecko. The rally has helped the industry recover from the devastating downturn of 2021, which exposed widespread fraud and risky practices during the sector’s earlier boom.
