Recent data reveals a remarkable surge in global investments in digital asset products, with the total inflows reaching $2.2 billion last week—the highest level seen in three months. This upsurge marks the most substantial weekly inflow since July, driven by rising optimism around the forthcoming US elections, as highlighted in the latest report from CoinShares.
Optimism Fuels Investment Surge
James Butterfill, the Head of Research at CoinShares, noted that this remarkable growth can be primarily attributed to prevailing sentiment in the betting markets. Many anticipate that a Republican victory—viewed as more favorable for cryptocurrency policies—could be on the horizon in the upcoming elections.
“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.”
Polling data from Polymarket, a blockchain-based prediction market, indicates that Republican presidential candidate Donald Trump holds a 61% chance of winning the elections, while the Republican Party overall has a 43% probability of securing a majority of the votes.
This positive sentiment has correspondingly resulted in a significant 30% increase in trading volumes, leading to the assets under management (AUM) approaching the $100 billion mark.
Bitcoin and Ethereum Performance
During this reporting period, CoinShares attributed the inflow spikes primarily to substantial investments in Bitcoin Exchange-Traded Funds (ETFs) listed in the US. Spot Bitcoin ETFs alone garnered inflows of $2.13 billion after experiencing positive growth for six consecutive days, marking the first instance of weekly inflows surpassing $2 billion since March 2024.
Regional Variances in Crypto Investments
Interestingly, while US Exchange-Traded Products (ETPs) flourished, regions such as Canada, Sweden, and Switzerland witnessed outflows of $20 million, $18 million, and $15 million, respectively. Butterfill attributed these withdrawals to “minor profit-taking outside the US.”
Furthermore, with Bitcoin potentially heading towards the $70,000 threshold, short traders have entered the scene, leading to a $12 million influx into Short Bitcoin products, indicating a cautious approach from some investors.
Ethereum’s Positive Shift
In a turn of events, Ethereum has broken its previous trend of outflows, registering inflows of $58 million. This increase brings the month-to-date total for Ethereum to $22.5 million and marks a cumulative inflow of $783 million since the start of the current year.
Alternative Assets on the Rise
Several alternative digital assets also experienced favorable movements, with Solana, Litecoin, and XRP recording inflows of $2.4 million, $1.7 million, and $700,000, respectively.
