Why is the crypto market up today?

The cryptocurrency market is up today, as investors see spot Bitcoin ETF inflows and the results of last week’s US elections as drivers for bullish market momentum. The overall crypto market capitalization increased 1.85% in the last 24 hours to $2.77 trillion on November 11. The overall trade volume increased 75% on the day to $235 billion, confirming November’s upward trend.

Bitcoin BTC $88,314, the largest cryptocurrency by market capitalization, has increased 2.8% in the previous 24 hours to trade at $81,587, barely below the all-time high of $81,858 reached during early Asian trading hours on November 11.

Ether ETH $3,318.97, the second-largest cryptocurrency, fell 0.91% to roughly $3,166 at the time of publication. Other top-cap cryptocurrencies were also up, with Dogecoin DOGE $0.39, the largest meme coin by market capitalization, rising 23% in the last 24 hours and 151% in the previous 30 days, reaching a multi-year high above $0.30. Let’s take a closer look at the forces propelling the cryptocurrency market upward today.

Crypto market basks in Trump’s election victory

Bitcoin and other cryptocurrencies have surged since President-elect Donald Trump won the 2024 US presidential election. Trump had made bold promises regarding Bitcoin, even considering creating a strategic national reserve.

The larger crypto sector will gain more from Trump’s promised crypto-friendly regulatory climate, which includes “a plan to ensure the United States will be the crypto capital of the planet.”  In such a climate, market players believe Bitcoin and other cryptocurrencies will trade much higher as a once-oppressive headwind in the world’s largest economy turns into a tailwind.

Furthermore, the October Consumer Price Index (CPI) and Producer Price Index (PPI), which are major macroeconomic events that traders anticipate this week, are important indicators of inflation. The US central bank is now dealing with contradictory signals, but stated last week that it was confident that inflation was “sustainably moving towards 2%” when it dropped interest rates by 0.25%. On November 14, further unemployment claims data will be released, as will PPI and Fed Chair Jerome Powell’s economic Outlook address. According to the most recent data from CME Group’s Fed Watch Tool, the Fed is expected to decrease interest rates by another 0.25% at its next meeting on December 18.

Market volatility liquidates $630M

The rise in the prices of key cryptocurrencies has resulted in massive liquidations in the crypto futures market during the last several days. Shorts were caught off guard, resulting in a rapid wave of leveraged liquidations.

Over $634 million in crypto holdings have been liquidated in the last 24 hours, with an additional $203 million lost in the last 12 hours. Short BTC leveraged positions worth $121 million were also liquidated on the day. Over 210,940 traders were liquidated, with the highest single liquidation being BTC/USDT on the OKX cryptocurrency exchange, worth $15.5 million.

Investors flock to crypto investment funds

The crypto market’s continuous increases are consistent with the massive cash flows into cryptocurrency investment products. According to Coin Shares’ “Digital Asset Fund Flows Weekly” report issued on Nov. 11, institutional investors boosted their exposure to digital assets, with crypto investment products receiving total inflows of $1.98 billion during the week ended Nov. 8. Once again, Bitcoin investment funds earned $1.8 billion in inflows, accounting for the majority of the movement. The year-to-date inflows set a new high of $31.3 billion.

Coin Shares’ head of research, James Butterfill, attributed positive investor sentiment to US presidential election outcomes and supportive macroeconomic conditions. “A combination of a supportive macro environment and seismic shifts in the US political system being the likely reason for such supportive investor sentiment.” Meanwhile, SoSoValue stated that nearly $1.6 billion moved into spot Bitcoin ETFs between November 4 and November 8. Approximately $1.4 billion was invested in these financial products on November 7 alone. The long-term trend for spot Bitcoin ETF flows continues to rise, indicating a large increase in demand over the last 30 days, which has a favorable impact on BTC prices.

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