Cryptocurrency-based investment products are continuing their positive trend after recording inflows of nearly $1 billion this week, seemingly fueled by the upcoming US presidential election. Bitcoin (BTC) led positive net inflows for the third week in a row, making October the fourth month of crypto investment product inflows on record.
Bitcoin is leading the influx of crypto investment products
On Monday CoinShares published the Digital Asset Fund Flows Weekly Report, which shows that digital asset inflows reached $901 million last week. Despite representing a 59% decline from the $2.2 billion recorded the previous week, cryptocurrency-based products are maintaining a three-week streak of positive net flows.
Following this week’s performance, the Year-to-date (YTD) product inflows reached the $27 billion mark, nearly tripling the previous record of $10.5 billion set in 2021. Furthermore, this month’s inflows represent 12% of total assets under management (AUM), making it the fourth largest monthly inflow ever, with $3.36 billion year to date (MTD).
Weekly Crypto Asset Flows: Source: CoinShares
In the first week of October, investment products posted negative net flows of $147 million as market performance weakened investor sentiment. However, crypto products recovered the following week with an inflow of $407 million.
Last week, Bitcoin products led the performance of crypto products with an inflow of $920 million. According to data from Farside Investors, Bitcoin Spots Exchange-Traded Funds (ETFs) saw $997.5 million in positive net flows. Meanwhile, short Bitcoin positions saw outflows of $1.3 million, down significantly from the $12 million inflows recorded the week before.
In addition to Bitcoin, also Solana-based products included the second largest inflow per asset, adding $10.8 million last week, seemingly fueled by the positive sentiment surrounding the cryptocurrency.
Nevertheless, Ethereum products moved countercurrently, seeing the largest outflows of any asset last week at $35 million. This performance, seemingly fueled by overall negative investor sentiment towards the assets, is in stark contrast to the $58 million inflow recorded the week before.
Influence of US politics on the performance of crypto products
Regionally, the US led the positive net product flow with an inflow of $906 million, likely linked to the upcoming November elections. According to CoinShares, Bitcoin’s current price action and flows are heavily influenced by US politics, with this month’s rise likely fueled by Republican poll gains.
This was also the case recently with IntoTheBlock revealed that Bitcoin’s price rise has been linked to Donald Trump’s chances of winning the November presidential election. Trump, who is running for the Republican Party, has embraced the crypto industry during his campaign.
The former US president’s crypto-friendly statements have been positively received by the industry, with public support and crypto donations from industry figures. Moreover, so too does the industry’s main support for pro-industry candidates appear to have been influenced the Democratic Party’s shift to a more welcoming stance, with Kamala Harris’ campaign acknowledging the industry in several statements.
Several analysts have predicted a significant increase in the price of Bitcoin in the event of a Trump victory. Meanwhile, experts have shared mixed opinions with some on the performance of the crypto market if the Democratic candidate wins the election suggestive it would not be “as bearish” as investors expect.
After the presidential debate, Donald Trump fell behind Harris in the prediction markets but recovered earlier this month, boosting his odds significantly in recent weeks. According to Polymarket, Trump’s winning chances are 66%.
Bitcoin (BTC) is trading at $68,930 in the weekly chart. Source: BTCUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com