Global Digital Asset Investment Products See $2.2 Billion Inflows Amid US Election Optimism
Global digital asset investment products saw a surge in inflows last week, reaching a three-month high of $2.2 billion, according to CoinShares’ latest weekly report. This marks the largest weekly inflow since July, with optimism surrounding the upcoming US elections driving the increase.
James Butterfill, Head of Research at CoinShares, pointed to expectations from betting markets that the Republican party, perceived as more supportive of cryptocurrencies, could win the election. He stated, “We believe this renewed optimism stems from growing expectations of a Republican victory in the upcoming US elections, as they are generally viewed as more supportive of digital assets.”
Data from Polymarket, a blockchain-based prediction market, shows that Republican presidential candidate Donald Trump has a 61% chance of winning the elections, with the party also having a 43% chance of sweeping the votes. This positive sentiment led to a 30% increase in trading volumes, pushing the value of assets under management (AUM) to nearly $100 billion.
Bitcoin led the surge in inflows, with significant investments in US-traded Bitcoin ETFs driving inflows to $2.13 billion. This is the first time weekly inflows into Bitcoin ETFs have exceeded $2 billion since March 2024. On the other hand, crypto products in regions like Canada, Sweden, and Switzerland saw outflows, possibly due to “minor profit taking outside the US,” according to Butterfill.
Ethereum also saw a reversal in outflows, recording $58 million in inflows. Other alternative assets like Solana, Litecoin, and XRP also posted gains, with inflows of $2.4 million, $1.7 million, and $700,000, respectively.
Overall, the positive sentiment surrounding the US elections and the potential for a Republican victory have driven a significant increase in inflows into digital asset investment products, with Bitcoin leading the way and Ethereum following suit. Investors are closely watching the market as it approaches the $70,000 mark, with caution reflected in the influx of short Bitcoin products.
