Election sparks $2.19B weekly crypto inflows: Here’s what changed

Crypto investment inflows hit $2.19 billion, and YTD net inflows soared to $33.5 billion.
Bitcoin dominance strengthened with $1.48 billion inflows amid a record-high $93,477 price.

As an analyst with over a decade of experience in the financial markets, I find the recent surge in crypto investment inflows particularly intriguing. The confluence of monetary policy easing and the political climate in the U.S. seems to be creating a perfect storm for digital assets.

The latest U.S. presidential election has noticeably impacted the cryptocurrency sector, igniting increased interest among investors.

Last week saw a significant surge of approximately $2.19 billion into global cryptocurrency investment products. This weekly increase brings the total year-to-date (YTD) net inflows to an extraordinary $33.5 billion, according to the latest data from CoinShares.

The surge in Bitcoin’s price to a historic high of $93,477, which coincided with it, significantly boosted the value of assets managed by cryptocurrency investment funds, estimated to be around $138 billion.

Remarking on the same, James Butterfill, Head of Research at CoinShares, noted,

The sudden increase in action seems to be fueled by a mix of easier monetary strategies and the Republican party’s complete victory in the latest U.S. elections.

Crypto inflows surge

The report revealed a dynamic week for crypto investment products. Inflows initially reached $3 billion, but Bitcoin’s new all-time high spurred significant profit-taking and outflows.

Despite this, Bitcoin-focused investment products attracted $1.48 billion, while Ethereum [ETH] products garnered $646 million in inflows.

Contrarily, investments linked with numerous cryptocurrencies experienced withdrawals amounting to approximately $19.4 million, while Binance‘s BNB-related products recorded around $400,000 in withdrawals.

That being said, since the September interest rate cuts, total inflows have hit $11.7 billion.

The increase is being linked to the impacts of easier monetary policies and the significant win of the Republican Party in the latest U.S. elections, indicating a substantial change in investor attitudes.

Bitcoin ETF dominance prevails

As anticipated, Bitcoin held onto its leading position in the market, attracting approximately $1.48 billion in investments. This surge was primarily driven by the robust performance of U.S.-based exchange-traded funds (ETFs) specializing in spot trading.

According to data from CoinShares, BlackRock’s IBIT contributed a significant amount of $2.1 billion, while Fidelity’s FBTC added $4 million in investments. On the other hand, investment funds such as Ark 21Shares and Grayscale saw withdrawals totaling $153 million and $108 million respectively.

The surge of Bitcoin prices over $9,000 has not only been met with optimism but also triggered pessimistic feelings, leading to an investment of approximately $49 million in Bitcoin short-selling products.

Ethereum saw significant investment, with approximately $646 million flowing into it. This surge was largely driven by the results of recent elections and excitement surrounding the upcoming update for the Beam Chain.

Other cryptocurrencies such as Solana (SOL), Ripple (XRP), and Cardano (ADA) experienced growing attention, drawing in approximately $24 million, $4.3 million, and $3.4 million respectively. This suggests that investors are increasingly expanding their investment portfolios by diversifying into these coins.

In conclusion, Buterfill put it best when he said,

In the coming four years, we might experience a remarkable boost in institutional backing, more government involvement, and wider acceptance among the general public. This could pave the way for Bitcoin to strengthen its position even more within the international financial system.

2024-11-19 18:32

Crypto inflows surge

Bitcoin ETF dominance prevails

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