Bitcoin Leads Crypto Investment Product Inflows With $920 Million Added Last Week – Report

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As a seasoned crypto investor with a decade of experience under my belt, I can confidently say that this week’s inflows into Bitcoin and other digital assets have been quite intriguing. The political climate, particularly the upcoming US Presidential elections, seems to be playing a significant role in shaping the market dynamics.

Investment products linked to cryptocurrencies saw another week of growth, with approximately $1 billion poured in, largely driven by anticipation towards the upcoming US Presidential elections. For the third week in a row, Bitcoin (BTC) led the way in positive net investments, making October one of the top four months for crypto investment product inflows since records began.

Bitcoin Leads Crypto Investment Product Inflows

Last Monday, CoinShares disclosed their Digital Asset Fund Flows Weekly Report, showing that inflows for digital assets amounted to approximately $901 million during the past week. Although this is a significant 59% decrease compared to the $2.2 billion influx from the week prior, crypto-related products have maintained a three-week trend of positive net flows.

This week’s performance saw our products’ Year-to-date (YTD) investments surge past $27 billion, almost three times the previous high of $10.5 billion reached in 2021. Moreover, this month’s investments account for 12% of our total assets under management (AUM), placing it as the fourth-largest monthly inflow ever, with a significant $3.36 billion added so far this month (MTD).

During the initial week of October, there was a total withdrawal of approximately $147 million from investment products due to the market’s less favorable performance, which negatively impacted investor confidence. Interestingly, the subsequent week saw a reversal for crypto products, with an influx of around $407 million.

Over the past week, Bitcoin-related investment products surpassed other crypto assets, attracting a total of approximately $920 million. As reported by Farside Investors, specifically, Bitcoin Spot Exchange-Traded Funds (ETFs) accumulated a staggering $997.5 million in positive inflows. Conversely, investments in short positions for Bitcoin experienced outflows amounting to $1.3 million, marking a significant decrease from the $12 million inflows seen just the week before.

Additionally, Solana-based assets saw the second highest influx of funds among all assets last week, with a total of $10.8 million invested, likely driven by optimistic feelings towards the cryptocurrency.

Nonetheless, Ethereum products moved counterflow, seeing the largest outflows of any asset last week at $35 million. This performance, seemingly fueled by investors’ overall negative sentiment toward the asset, contrasts with the $58 million inflows recorded the week prior.

US Politics Influence On Crypto Products Performance

In terms of regional trends, the United States saw a positive net flow of approximately $906 million in products, possibly due to the upcoming November elections. As suggested by CoinShares, Bitcoin’s recent price fluctuations and inflows appear to be significantly impacted by U.S. politics. This month’s increase could be attributed to the Republican party’s poll gains.

Similarly, it was recently disclosed by IntoTheBlock that Bitcoin’s recent price increase seems to be connected with Donald Trump’s potential victory in the November presidential election. Trump, the Republican Party’s nominee, has been supportive of the cryptocurrency sector during his campaign.

The previous U.S. President’s supportive comments regarding cryptocurrency have been well-received within the sector, gaining both public approval and financial backing from notable figures in the industry. Furthermore, the sector’s active endorsement of pro-industry candidates appears to have impacted the Democratic Party’s stance, as evident by Kamala Harris’ campaign recognizing the cryptocurrency sector in multiple statements.

In summary, various analysts foresee a significant increase in Bitcoin’s price should Donald Trump win the election. On the other hand, experts offer differing views on how the crypto market might fare if the Democratic candidate emerges victorious. Some even propose that the market may not be as pessimistic or bearish as some investors anticipate.

Following the presidential debate, Joe Biden’s running mate Kamala Harris gained an advantage over Donald Trump in prediction markets, but Trump has made a strong comeback in recent weeks and now stands at approximately a 66% chance of winning according to Polymarket.

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2024-10-29 10:42