US exchange-traded funds dedicated to investing in Bitcoin and Ethereum have seen exceptional demand, driven by President-elect Donald Trump’s promises to ease regulatory restrictions on the cryptocurrency sector.
In November, Bitcoin and Ethereum ETFs saw record monthly inflows of $6.5 billion and $1.1 billion, respectively. Ethereum ETFs also saw record daily subscriptions last Friday.
Meanwhile, the crypto market has not only been boosted by Bitcoin and Ethereum, with XRP, a token linked to Ripple Labs, jumping to the third-largest cryptocurrency, with its market cap rising by nearly $100 billion.
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Increased speculation
This surge in interest in Ethereum, the second-largest cryptocurrency after Bitcoin, indicates increased speculative activity in the cryptocurrency market following the US elections on November 5. However, this momentum does not yet appear to have reached the levels of mania seen during previous bubble periods, especially among retail investors.
“Bitcoin is often the first mover in market prices, but it has a positive impact on other assets,” said Caroline Buller, CEO of BTC Markets. She added that the inflows into cryptocurrency exchanges show that the market has not yet peaked.
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Ethereum Performs Strongly After Trump Win
The nine Ethereum exchange-traded funds (ETFs) saw net cash inflows of $333 million on November 29 alone. The inflows were led by BlackRock’s iShares Ethereum Trust and Fidelity Investments’ Ethereum Fund.
BlackRock, Fidelity, and Grayscale Investments are among the largest issuers of digital asset funds by market size.
Bitcoin is trading around $96,000 today, down about 0.6% in the last 24 hours, after approaching $100,000 last month for the first time. Ethereum, on the other hand, is trading at $3,664, down 1%. While Ethereum has outperformed Bitcoin since the Trump election, it has yet to set new all-time highs.
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Presidential support for cryptocurrencies
Trump has announced his intention to ease the regulatory restrictions imposed by the Biden administration on cryptocurrencies, and confirmed his intention to appoint officials who support the sector to regulatory bodies. The Republican president also supports the idea of creating a US strategic reserve of Bitcoin.
It is worth noting that Trump's position on cryptocurrencies has changed radically, as he was initially one of the most prominent skeptics, but he adopted a supportive view after this industry contributed to financing his election campaign.
Since Trump’s election, the cryptocurrency market cap has surged by about $1.2 trillion. This massive recovery has eclipsed memories of the great crash of 2021, which exposed fraudulent practices and high risks during the peak of the market’s boom.
historical high
Trump’s victory has sparked a wave of speculative enthusiasm in crypto markets, as the president-elect is expected to deliver on his pledges to foster a favorable environment for digital asset companies in the United States. Even against this backdrop, XRP’s rally has been impressive: In recent weeks, its market cap has surpassed rivals Solana and USDT, the stablecoin Tether, according to data from Saudi Investing.
The coin surged 15% on Monday to $2.50, taking its market cap to more than $137 billion, up from less than $30 billion on Nov. 5 when Trump won the election.
In 2020, the US Securities and Exchange Commission filed a lawsuit against Ripple Labs, alleging that the San Francisco-based company violated the law when it raised money by selling XRP without registering it as a security.
Later, the agency, under the chairmanship of Gary Gensler, filed lawsuits against several digital asset companies including Quizbase and Binance. On the campaign trail, Trump vowed to fire Gensler, who now intends to step down in January, the day the president-elect is scheduled to be inaugurated. Trump has pledged to appoint crypto-friendly officials and support the creation of a U.S. strategic reserve of bitcoin.