Bitcoin hits record high amid U.S. election results

As of Wednesday morning, more than 250 pro-crypto candidates had been elected to Congress.

There’s never a dull moment on the blockchain. Here’s what you need to know this week:

Bitcoin charts new highs amid U.S. election results. Plus, BTC ETFs saw massive inflows, and a key Solana metric hit an all-time high.

What macro stories are driving crypto markets (beyond the election)? The Fed’s next rate-cut decision, and other significant headlines to watch.

This week in numbers. The total sum wagered on the U.S. election via Polymarket, October’s crypto fundraising figures, and more stats to know.

$95,257.12

$3,283.59

$1.00

$2.21

$180.74

$0.31

See the latest prices

MARKET BYTES

Bitcoin hits new all-time high amid U.S. election results

Throughout 2024, crypto prices have surged and dipped as traders tried to anticipate the impact of factors ranging from the U.S. presidential election and interest rates falling from two-decade highs, to inflation slowing and the rise of crypto exchange-traded funds (ETFs).

Now at least one of those questions has been answered, with Donald Trump winning the U.S. presidential election. Crypto prices spiked amid Tuesday’s U.S. election results, with BTC hitting a new all-time high above $75,000. As of Wednesday morning, ETH was up 8%, SOL was up 11%, and DOGE was up 20%.

What might happen next? According to Bloomberg, “the futures market is suggesting that the record-breaking rally in Bitcoin triggered by Donald Trump’s victory in the U.S. presidential election may just be getting started.”

Here are three more market stories you should know about…

Up next: A more crypto-friendly Congress

Beyond the presidential election, crypto voters in down-ballot races have helped change the landscape for how crypto is viewed in Washington.

Following Tuesday’s election results, Coinbase CEO Brian Armstrong wrote, “Welcome to the new members of America’s most pro-crypto Congress ever.”

What is the crypto industry looking for from lawmakers? As a16z crypto general partner Chris Dixon put it, “Many industries come to DC asking to roll back rules, and we have come to DC asking to establish them.” (a16z is an investor in Coinbase.)

Bipartisan issue… A recent Coinbase survey found that nearly three quarters of crypto voters say that crypto and blockchain legislation should be non-partisan and that both parties should back crypto-friendly legislation.

BTC ETFs saw a massive reversal from outflows to inflows

This week saw major shifts for BTC ETFs. On Monday, around $579 million flowed out of the 12 U.S. spot bitcoin ETFs — the worst single day for the asset class. By Wednesday morning, however, that dynamic appeared to have reversed, with BlackRock's leading IBIT ETF tallying $1 billion in inflows in the first 20 minutes of trading.

Go with the flow… Putting IBIT’s initial Wednesday inflows in context, Bloomberg analyst Eric Balchunas explained on X: “That’s about what [IBIT] does in a full day. Other bitcoin ETFs in same boat, crazy volume.”

Activity surged on Solana in October

There were more than 123 million active addresses on Solana in October, an all-time high, according to The Block. October’s number marked a huge increase over earlier this year: in August, for instance, Solana had around 26 million active addresses. How does that compare to other blockchains? As of September, Solana boasted almost twice as many active addresses as Ethereum and other similar networks combined, according to a16z’s latest State of Crypto report.

Meme team… The biggest driver of all that activity, as The Block notes, has been an avalanche of memecoins generated by apps like Pump.fun and Raydium, which allow users with little technical knowledge to create and sell tokens. Earlier this week, more than 1,000 new tokens related to the election were launched in just 24 hours.

Learn about SOL

MACRO MOVES

The Fed’s next rate cut, and other key market moving headlines to watch (beyond the election)

The U.S. presidential election might have had every market watcher captivated this week, but it's not the only story worth keeping an eye on as investors wonder which way markets might break next.

With another U.S. Federal Reserve rate cut seen as likely to occur, a consistent drumbeat of major institutions making big crypto investments, and new crypto ETFs in the works, some analysts are looking beyond the election results and toward crypto’s long-term bullish trend.

Here’s everything you need to know.

Will the Federal Reserve keep cutting interest rates?

The Federal Open Market Committee has their second-to-last meeting of the year this week, and investors are widely expecting the central bank to continue their interest rate cutting campaign, which began earlier this fall with a 0.5% rate cut.

After last week’s unemployment data showed the unemployment rate remaining unchanged at 4.1%, and 100,000 fewer job gains than expected, the CME Group has assigned a 99% chance, as of Wednesday, of the Fed cutting rates by 0.25% on Thursday. A rate cut would bring the federal funds rate down to 4.50%.

Typically, rate cuts are seen as a bullish development for stocks and crypto, as looser monetary policy makes borrowing cheaper, potentially boosting liquidity. After the rate cut following September’s FOMC meeting, bitcoin gained around 8% within a week.

Big institutions, from state governments to public companies, keep buying crypto

The launch of BTC and ETH ETFs this year opened the floodgates for the biggest financial institutions and funds in the U.S. to begin investing in crypto, and that trend appears to be accelerating.

This week, the State of Michigan Retirement System disclosed an approximately $10 million investment in spot ETH ETFs. With the investment, Michigan became the first state to invest in ether. Florida, which has more than $800 million in “crypto-related” investments, also appears poised to follow suit: The state’s chief financial officer wrote in a recent letter that the state’s pension fund should direct “a portion of state retirement system monies into cryptocurrency.”

And last week, Emory University became the first university to publicly disclose investing in spot bitcoin ETFs, announcing an approximately $16 million investment from its endowment.

Corporations are also increasing their bitcoin holdings in a significant way. MicroStrategy, which already owns around $18 billion worth of bitcoin, announced a plan last week to buy $42 billion more of bitcoin over the next three years. Semler Scientific, a healthcare company, recently purchased $2.6 million in bitcoin, bringing its holdings to around $73 million.

More crypto ETFs could be on the horizon

It’s been a big year for crypto investment products, with nearly $30 billion sitting in funds for assets like BTC, ETH, and SOL.

Last week, the Swiss firm 21Shares filed paperwork with the U.S. Securities and Exchange Commission seeking approval for an ETF that holds XRP, which is the fifth-largest cryptocurrency (excluding stablecoins). Earlier this year, Bitwise, Canary Capital, and Grayscale also filed to launch XRP ETFs.

It’s been a busy period for firms seeking to launch crypto ETFs. 21Shares, VanEck, and Canary Capital have filed paperwork with the SEC seeking approval for Solana ETFs; Grayscale is looking to launch a crypto index ETF that would hold a variety of tokens including SOL and AVAX; and Canary Capital is looking to launch an ETF for Litecoin, the 20th-largest token.

The bottom line…

While the election has been a large narrative focus in recent months, many analysts believe that the crypto market’s long-term outlook will also be determined by significant macroeconomic factors, like rate cuts and institutional adoption. “From a macroeconomic perspective, everything is signaling the likelihood of increased exposure to risk assets for large investors,” said Rob Hadick, general partner at the crypto venture firm Dragonfly.

NUMBERS TO KNOW

$3.6 billion

The approximate amount in bets that were placed on the U.S. presidential election results via the real-world betting platform Polymarket. While the two primary candidates saw the vast majority of wagers, a variety of other individuals including Kanye West, Michelle Obama, and Hillary Clinton also had millions of dollars in bets placed on their chances.

$1.76 billion

The total amount of crypto fundraising in October, marking the highest level since November 2023, and a 96% increase month-over-month, according to Messari research. October also saw a 25% increase in the number of deals month-over-month, as well as an 18% increase in “early-stage” deal volume.

Age, as of October 31, of Satoshi Nakamoto's Bitcoin whitepaper, which outlines the core mechanics of the cryptocurrency. Next up, Bitcoin will celebrate the 16th anniversary of the first transaction ever recorded on the network on January 3.

SECURITY PSA

How to avoid Bitcoin ATM scams

Bitcoin ATMs can be a major convenience for crypto owners, but they can also be a feeding ground for scammers. Scams tied to Bitcoin ATMs (known as BTMs) are increasing, with consumers reporting $114 million in combined losses from scams involving BTMs last year — an increase of nearly 900% from 2020.

In our latest blog post, we highlight the red flags to watch out for, and the quick tips to follow, to keep your assets safe and secure when using a BTM.

Learn about consumer protection