Election jitters and ETF outflows weigh on crypto market – Nansen Election jitters and ETF outflows weigh on crypto market – Nansen
The juncture of factors is putting a toll on crypto prices, and it is possible that relief will come only after the U.S. elections.
2 min read
Updated: Sep. 10, 2024 at 11:53 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Crypto markets are facing pressure from multiple fronts as the US elections, ambiguous macroeconomic data, and downbeat sentiment related to crypto exchange-traded funds (ETFs) outflows are weighing on prices, according to a recent report by Nansen.
Broad capitulation sentiment
US-traded spot Bitcoin (BTC) and Ethereum (ETH) ETFs have experienced negative flows for the second consecutive week. While Bitcoin ETFs bled by over $983 million in the past two weeks, Ethereum ETFs lost $103.5 million in the period, according to Farside Investors’ data.
This coincided with a net decrease in total stablecoin supply from Aug. 26 to Sept. 7, as roughly $450 million left the market. According to the report, this rare occurrence in 2024 may signal investor capitulation, unlike previous sell-offs in March and August.
Additionally, institutional interest in Ethereum-based products has waned, with VanEck closing its Ethereum Strategy ETF after less than a year and WisdomTree withdrawing its application for a spot Ethereum ETF with the U.S. Securities and Exchange Commission (SEC).
As a result, Nansen’s risk management indicators show negative BTC price momentum, while the BTC call-put spread is barely risk-on, suggesting a neutral market stance.
Additionally, Bitcoin is testing its 50-week moving average, while Ethereum challenges its 200-week moving average, both critical support levels.
Elections and uncertainty
The US presidential election is expected to create uncertainty for risk assets, such as crypto, until November. Markets may be underestimating the impact of a potential “Democratic sweep,” which could lead to increases in corporate and capital gains tax rates.
Yet, it could all boil down to today’s debate bringing a small breather to crypto prices, Harris’ lead in the polls could be impacted by a bad performance.
Macroeconomic data shows weakness in manufacturing activity across the Eurozone, China, and the US, as well as a cooling US labor market.
While services and consumer spending remain stable, dwindling savings among less affluent households may impact future consumption.
This paints an ambiguous picture where it is difficult to point out if the global economy is shifting to a slower pace of growth, or if it is slowly sliding into a recession. Furthermore, the Federal Reserve’s projected rate cuts, with markets pricing in 225 basis points reductions by 2026, may not be sufficient to stimulate growth in all sectors.
The disconnect between asset price expectations and the ongoing growth slowdown poses risks for investors, particularly in highly valued stocks. Thus, this uncertainty also subsides the appetite for risk in the market.
Mentioned in this article
Author 
Gino Matos
Gino Matos is a law school graduate and a seasoned journalist with six years of experience in the crypto industry. His expertise primarily focuses on the Brazilian blockchain ecosystem and developments in decentralized finance (DeFi).
Editor Editor 
Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Ethereum
$2,310.35
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Nansen
Nansen is a blockchain analytics platform that enriches on-chain data with millions of wallet labels.
VanEck
VanEck is a global investment manager with offices around the world, including New York, Australia, China, Germany, Netherlands and Switzerland.
WisdomTree
WisdomTree is a global financial innovator, offering a well-diversified suite of exchange-traded products (ETPs), models, and solutions.
