Dogecoin Surges as Bitcoin ETFs Decline Ahead of U.S. Elections
Dogecoin gains 10% fueled by Elon Musk’s support, while Bitcoin ETFs see major outflows as U.S. election polls tighten, impacting crypto market sentiment
In the lead-up to the U.S. elections, Dogecoin (DOGE) is gaining momentum thanks to support from Elon Musk, while Bitcoin-related ETFs face substantial withdrawals. Musk recently backed a proposal for a "Department of Government Efficiency," a nod to Dogecoin abbreviated as "D.O.G.E.," fueling renewed excitement among DOGE supporters. This endorsement has driven Dogecoin's price up over 10% in the past 24 hours, positioning it as the only major cryptocurrency in the green.
At the same time, Bitcoin (BTC) and other top tokens are struggling, with Bitcoin itself down nearly 3%. Losses in major tokens range from 1% to 5%, pulling down the broader CoinDesk 20 Index (CD20), which tracks the largest cryptocurrencies by market cap, by 3%.
Dogecoin has been climbing steadily, now up 50% over the past month. Musk’s alignment with certain government reforms, specifically aimed at efficient spending and monetary policies, has brought new attention to DOGE. The proposal, with the playful abbreviation, has helped Dogecoin stand out even as other tokens slide.
Meanwhile, Bitcoin ETFs in the U.S. recorded notable outflows, totaling $541 million on Monday, the highest since May. BlackRock’s IBIT ETF was the only one to register inflows, with $38 million added. In contrast, Fidelity’s FBTC saw the largest outflows at $169 million, followed by Ark Invest’s ARKB at $138 million, and Grayscale’s BTC Trust with $90 million withdrawn. This trend suggests cautious investor sentiment toward Bitcoin just before the elections.
Another factor weighing on Bitcoin was the recent $2.2 billion transfer from the defunct Mt. Gox exchange to new wallets. Such movements often hint at repayments to creditors, which can lead to increased selling pressure and a drop in Bitcoin’s price.
The crypto market's reaction seems to be influenced by shifts in election polling. With Donald Trump’s lead narrowing, crypto traders are less confident of an election result favorable to digital currencies, given Trump’s pro-crypto stance. Market volatility may continue as investors wait for final election results and an expected Federal Reserve rate cut announcement later this week, which could further affect short-term prices.
The upcoming days hold significant potential for market swings as traders watch both the election results and the Fed's policy decisions closely.
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