Key Points
Political Developments Influence Crypto Investments
Analysts at CoinShares have reported that global crypto investment products have seen inflows of $407 million. This increase is largely due to the anticipation of the U.S. elections and not monetary policy. Asset managers including BlackRock, Fidelity, and Grayscale have experienced this robust inflow. James Butterfill, the head of research at CoinShares, noted this shift in investor focus in a recent blog report.
The data shows a growing optimism about political developments. The recent vice presidential debate and a polling shift favoring Republicans, who are typically seen as more supportive of crypto, have sparked renewed interest. Butterfill stated that stronger-than-expected economic data had little impact on stemming outflows.
As expected, Bitcoin (BTC) received the most inflows at $419 million. This positions it as the main beneficiary of these political shifts. Meanwhile, Ethereum (ETH) resumed its trend of outflows with a total of $9.8 million last week.
Investment products shorting Bitcoin faced outflows totaling $6.3 million. This shows a clear divergence in investor sentiment. Despite stronger-than-expected economic data, which usually influences market behavior, it had little effect on stemming outflows from other asset classes. The concentration of inflows in crypto seems to indicate a change in narrative. Investors are prioritizing political events over economic indicators.
The U.S. accounted for a significant $406 million of the inflows, with Canada contributing a modest $4.8 million. Multi-asset investment products continued their upward trajectory with a 17th consecutive week of inflows, albeit at a minor $1.5 million.
Butterfill noted that blockchain equity exchange-traded funds saw one of the largest weekly inflows this year. They allocated $34 million, likely in response to recent Bitcoin price rises.
