Investing.com-- Bitcoin rose on Tuesday, reversing recent declines ahead of a tightly contested presidential election.

The world’s biggest cryptocurrency had come within spitting distance of a record high last week, before sharply pulling back as traders grew more uncertain over the upcoming election. 

Losses in broader risk-driven markets, especially stocks, also showed that sentiment remained weak, with a Federal Reserve meeting later this week also coming into focus.

Bitcoin climbed 2.6% to $70,218.0 by 09:50 ET (14:50 GMT). 

Trump and Harris set for a close contest

Initial gains in Bitcoin were driven by increased speculation that Donald Trump would beat Kamala Harris in the upcoming elections.

But recent polls and prediction markets showed Trump’s lead had largely evaporated heading into the elections, with voting set to begin later on Tuesday.

Trump had promised crypto-friendly policies, with increased bets on a Trump victory driving sharp gains across crypto markets last week. Harris has also pledged to a crypto regulatory framework, although both candidates have given few actual details on their plans for crypto.

Online prediction market Polymarket showed Trump’s odds at 59.1%, while Harris’ odds were at 40.9%. An Investing.com poll showed 78% of users expect a Trump victory. 

Crypto price today: altcoins climb, Fed in focus 

Broader crypto prices traded in a flat-to-low range on Tuesday, although most altcoins were nursing recent losses in tandem with Bitcoin.

World no.2 crypto Ether added 0.7% to $2,467.41.

XRP and ADA rose 1% and 2.4%, respectively, and SOL and MATIC climbed more than 3% and 4%, respectively. Among meme tokens, DOGE outperformed, surging 14%.

Focus this week was also on a Federal Reserve meeting on Thursday, where the central bank is widely expected to cut interest rates by 25 basis points.

Focus will also be squarely on signals from Fed Chair Jerome Powell on the Fed’s plans to cut rates further, especially as recent data showed U.S. inflation remained sticky.

But nonfarms payroll data from Friday showed a sharp cooling in the labor market, a trend that could elicit more rate cuts from the Fed. 

Bitcoin ETFs witness massive outflows ahead of US election

Traditional investors were eager to reduce risk on the eve of the US presidential election, with a massive $541 million withdrawn from US Bitcoin exchange-traded funds (ETFs) on Monday (NASDAQ:MNDY). This marks one of the largest outflows in these funds’ history, surpassed only by a $563.7 million outflow on May 1, a period when Bitcoin’s price was under significant pressure, according to data from CoinGlass.

Most Bitcoin ETFs recorded substantial withdrawals, except for BlackRock’s iShares Bitcoin Trust (IBIT), which attracted $38.4 million in new funds on Monday. In contrast, the Fidelity Wise (LON:WISEa) Origin Bitcoin Fund (FBTC) faced the largest single outflow, with $138.3 million withdrawn.

The ARK 21Shares Bitcoin ETF (ARKB) and Bitwise Bitcoin ETF (BITB) also saw hefty outflows, losing $138.3 million and $79.9 million, respectively.

In comparison, Bitcoin ETFs experienced a modest outflow of $54.9 million last Friday, following seven days of steady inflows. The surge in withdrawals appears tied to caution around the U.S. presidential election set for Tuesday.