Risk-On ETFs Soar After Trump Win, Crypto Funds See Gains

Risk-on ETFs have experienced a massive surge in inflows after Donald Trump's victory in the US Presidential Election, with some crypto ETFs showing substantial gains as well. Bitcoin ETFs, like BlackRock's IBIT, are not leading the rally but are still benefiting significantly from the bullish sentiment. Bloomberg's ETF analyst, Eric Balchunas, described the influx as a “Trump-inspired gusher of cash” hitting risk-on ETFs across the market. Although Bitcoin and other crypto ETFs aren’t the top gainers, they are enjoying notable increases in investments.

Federal rate cuts could potentially dampen the mood for risk-on assets, but crypto ETFs are positioned to maintain their resilience due to the sector's unique dynamics. Balchunas highlighted that Thursday's activity was exceptional, with risk-on ETFs drawing in $22 billion in a single day—a figure typically seen over an entire week. This inflow has pushed the year-to-date net flows to $856 billion, edging closer to the annual record.

Despite crypto ETFs not leading the rally, BlackRock's IBIT recorded impressive inflows of $1.12 billion on Thursday alone, with total spot Bitcoin ETFs hitting $1.38 billion that day. Other crypto-focused risk-on ETFs, such as the 2x Coinbase ETF (CONL), also posted remarkable gains, with CONL rising 62% in one day. These developments indicate a strong bullish trend for risk-on assets, even if crypto ETFs aren't dominating the performance charts.

Analysts, including Todd Sohn, noted that this spike acts as a "post-election release valve," indicating pent-up investor interest following the election. Although Bitcoin ETFs may not be among the biggest winners, the sector remains an attractive choice for risk-seeking investors, benefiting from the general upswing in the risk-on asset category. This surge hints at a wider optimism across high-risk investments as investors show renewed interest in both traditional and crypto-linked ETFs.