The world of crypto-based investment products has been experiencing a remarkable period of positive inflows, with nearly $1 billion recorded this past week. This surge seems to be driven by anticipation surrounding the upcoming US Presidential elections. At the forefront of this influx is Bitcoin (BTC), which has led the charge for the third consecutive week, making October a standout month for crypto investment product inflows historically.
Bitcoin Leads the Charge in Crypto Investment Product Inflows
According to the recently published Digital Asset Fund Flows Weekly Report by CoinShares, digital asset inflows reached an impressive $901 million last week. Although this represents a 59% decline from the prior week’s $2.2 billion, the market continues to enjoy a three-week streak of positive net flows. The year-to-date (YTD) inflows for these products have now reached a staggering $27 billion, nearly tripling the previous record of $10.5 billion set in 2021. This month’s inflow figures represent 12% of the total assets under management (AUM), making it the fourth largest monthly inflow on record, with $3.36 billion month-to-date (MTD).
In the initial week of October, crypto investment products faced a negative net flow of $147 million due to weakened market sentiment. However, the following week saw a recovery, with inflows totaling $407 million. Last week, Bitcoin products were the standout performers, garnering $920 million in inflows. Data from Farside Investors highlighted that spot Bitcoin Exchange-Traded Funds (ETFs) experienced positive net flows of $997.5 million. In contrast, short-Bitcoin positions saw a decrease in outflows, dropping to $1.3 million from the previous week’s $12 million inflows.
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Solana-based products also made a significant impact, recording the second-largest inflows by asset, with $10.8 million added last week. This was largely driven by positive sentiment surrounding the cryptocurrency. On the flip side, Ethereum products experienced the largest outflows of any asset last week, with $35 million exiting, in stark contrast to the $58 million inflows seen the week before. This trend appears to reflect a broader negative sentiment towards Ethereum among investors.
US Politics’ Impact on Crypto Product Performance
Regionally, the United States led the way with $906 million in inflows, a trend likely tied to the upcoming November elections. CoinShares reports that Bitcoin’s current price movements and flows are heavily influenced by US political developments, with the recent surge possibly fueled by gains in Republican polls.
IntoTheBlock recently suggested that Bitcoin’s price surge is linked to Donald Trump’s improving prospects of winning the November presidential election. As the Republican Party candidate, Trump has embraced the crypto industry, a move that has been well-received by the sector. His campaign has garnered public support and crypto donations from prominent industry figures. This has also seemingly prompted the Democratic Party to adopt a more favorable stance towards the industry, with Kamala Harris’ campaign acknowledging the sector in various statements.
Several analysts predict a significant surge in Bitcoin’s price should Trump secure victory. Meanwhile, experts have mixed opinions on the crypto market’s performance if the Democratic nominee wins, with some suggesting it may not be as bearish as anticipated. Following the presidential debate, Trump fell behind Harris in prediction markets but has since rebounded, significantly improving his odds in recent weeks. According to Polymarket, Trump’s winning odds now stand at 66%.
As of the latest update, Bitcoin (BTC) is trading at $68,930 on the weekly chart.
