Risk-On ETFs Attract $22 Billion in Inflows Following Trump Election Victory
Risk-on ETFs have seen significant inflows following Donald Trump's victory in the US Presidential Election, with some crypto ETFs also reporting notable gains. Bitcoin ETFs, such as BlackRock's IBIT, are benefiting from bullish sentiment but are not leading the rally. Bloomberg ETF analyst Eric Balchunas referred to the influx as a “Trump-inspired gusher of cash” for risk-on ETFs. While Bitcoin and other crypto ETFs are not the top gainers, they are experiencing notable increases in investments.
Potential federal rate cuts may impact risk-on assets negatively; however, crypto ETFs are expected to remain resilient due to their unique market dynamics. Balchunas noted exceptional activity on Thursday, with risk-on ETFs attracting $22 billion in a single day, an amount typically accumulated over an entire week. This surge has increased year-to-date net flows to $856 billion, nearing the annual record.
Although crypto ETFs are not leading the charge, BlackRock's IBIT saw substantial inflows of $1.12 billion on Thursday, contributing to total spot Bitcoin ETFs reaching $1.38 billion that day. Other crypto-focused risk-on ETFs, like the 2x Coinbase ETF (CONL), reported impressive gains, with CONL increasing 62% in one day. These trends indicate a strong bullish sentiment for risk-on assets, even if crypto ETFs are not at the forefront of performance.
Analysts, including Todd Sohn, characterized this spike as a "post-election release valve," reflecting pent-up investor interest after the election. While Bitcoin ETFs may not be the largest beneficiaries, the sector remains appealing for risk-seeking investors, gaining from the overall upswing in risk-on assets. This surge suggests broader optimism among high-risk investments as investors renew their interest in both traditional and crypto-linked ETFs.