Trump's re-election boosts Bitcoin ETF inflows.

Market update: 8th November 2024

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BTC Markets in the news

AFR: Euphoria floods crypto with bitcoin tipped to hit $US100,000.

Local digital asset exchange BTC Markets also noted a spike in volumes on Wednesday particularly in trades that were $US50,000 in value or more.

“It wasn’t just mum and dad, FOMO, retail investors coming in, these were larger trade sizes,” said BTC (Markets) chief executive Caroline Bowler.

“People that hadn’t traded on our platform since 2019 and were holding on to assets are now coming back into the market, and if that sustains, that to me is a green shoot indicator that we’re at the beginning of a bull market.”

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State of crypto

The return of retail: Trump’s re-election sparks surge in Bitcoin ETF inflows.

The resurgence of Donald Trump’s presidency is driving renewed optimism among retail investors, particularly in the digital asset space, as his pro-growth policies and favourable regulatory stance boost confidence. The BlackRock Bitcoin ETF, $IBIT, reported a remarkable US$1.1 billion in single-day inflows, underscoring investor trust in BlackRock and strong market sentiment. This makes $IBIT the fifth-largest ETF globally, a rapid rise compared to typical Bitcoin ETFs.

Retail investors are returning, driven by institutional confidence, Bitcoin’s price rally, and increasing regulatory clarity. BTC Markets has observed a 300% surge in user logins this week, reflecting this renewed retail interest. Looking forward, sustained inflows into crypto ETFs and exchanges could lead to greater market volatility and liquidity. The strong inflows suggest a growing perception of Bitcoin as a core investment asset, hinting at a potential long-term increase in market activity.

Market reflections

Global

Germany’s trade surplus narrows as exports stumble and imports surge.

Germany’s trade surplus took a hit in September, falling to EUR 17 billion from EUR 21.4 billion in August, missing expectations of EUR 20.9 billion. Exports dropped 1.7%, driven by lower shipments to the EU, China, and the UK, though there was some strength in exports to Russia and the US. Meanwhile, imports rebounded with a 2.1% rise, especially from China and Russia, even as imports from the US and UK declined. Overall, Germany’s trade balance has racked up a EUR 186.9 billion surplus for the first nine months of 2024.

Bank of England cuts rates again as inflation cools but expansionary budget looms.

The Bank of England cut its interest rate by 25 basis points to 4.75% in November, as anticipated, marking its second reduction this year after beginning its easing cycle in August. The vote was more decisive than expected, with 8 out of 9 Monetary Policy Committee (MPC) members supporting the cut, while Catherine Mann voted to hold. The decision comes as inflation in the UK has cooled significantly, with September’s rate dropping to 1.7%, the lowest in over three years. Despite a decline in services inflation to 4.9%, it remains relatively high.

The Bank projects that inflation will end 2024 at 2.5%, easing further to 2.2% by 2026. However, the expansionary budget from the Labour Party is expected to add 0.5 percentage points to peak inflation and boost GDP growth by up to 0.75% within a year.

Fed cuts rates again but hints at potential pause as data drives future moves.

The Federal Reserve reduced the federal funds rate by 25 basis points to a range of 4.5%-4.75% at its November meeting, following a larger 50 basis point cut in September. This move was widely expected as the Fed continues to assess economic data and risks before making further decisions.

Chair Jerome Powell emphasised there is no pre-set path for future rate changes, signalling that each meeting’s decision will be data driven. Powell also hinted at a possible pause in December, depending on upcoming data, but did not confirm any plans either way.

Addressing the impact of Donald Trump’s election victory, Powell noted it would not influence the Fed’s immediate policy stance, stating the central bank does not speculate on future government actions.

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