In the run-up to the US 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 to “DOGE,” sparking renewed enthusiasm among DOGE supporters. This support has seen the price of Dogecoin rise more than 10% in the last 24 hours, positioning it as the only major cryptocurrency in the green.
At the same time, Bitcoin (BTC) and other major tokens are struggling, with Bitcoin itself down almost 3%. Losses on top tokens range between 1% and 5%, reducing the broader CoinDesk 20 Index (CD20), which tracks the largest cryptocurrencies by market cap, by 3%.
Dogecoin has been rising steadily and is now up 50% over the last 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 a fun abbreviation, has helped Dogecoin stand out even as other tokens fall.
Meanwhile, Bitcoin ETFs in the US saw notable outflows, totaling $541 million on Monday, the largest since May. BlackRock’s IBIT ETF was the only one to record inflows, with $38 million added. In contrast, Fidelity’s FBTC recorded the largest outflows with $169 million, followed by Ark Invest’s ARKB with $138 million and Grayscale’s BTC Trust with $90 million withdrawn. This trend suggests cautious investor sentiment towards Bitcoin just before the election.
Another factor weighing on Bitcoin was the recent transfer of $2.2 billion from the defunct Mt. Gox exchange to new wallets. These moves often hint at payments to creditors, which can lead to increased selling pressure and a drop in Bitcoin price.
The crypto market’s reaction appears to be influenced by changes in electoral polls. With Donald Trump’s lead narrowing, cryptocurrency traders are less confident in a pro-digital election outcome, given Trump’s pro-crypto stance. Market volatility may continue as investors await final election results and the Federal Reserve’s expected rate cut announcement later this week, which could further impact prices in the near term.
The coming days have significant potential for market swings as traders closely watch both the election results and the Federal Reserve’s policy decisions.
Also read: Larry Fink Believes Bitcoin Could Replace Gold: Perspectives on the Future of Cryptocurrencies