Crypto-based investment products continued their positive streak after recording nearly $1 billion in inflows this week, seemingly fueled by the upcoming US Presidential elections. Bitcoin (BTC) led the positive net flows for the third consecutive week, making October the fourth largest month of crypto investment product inflows on record.
Bitcoin Leads Crypto Investment Product Inflows
On Monday, CoinShares published its Digital Asset Fund Flows Weekly Report, revealing that digital asset inflows reached $901 million last week. Despite representing a 59% decline from the $2.2 billion recorded the previous week, the crypto-based products maintain a three-week streak of positive net flows.
Following this week’s performance, the products’ Year-to-date (YTD) inflows hit the $27 billion mark, nearly tripling the previous record of $10.5 billion, set in 2021. Additionally, this month’s inflows represent 12% of total assets under management (AUM), making it the 4th largest monthly inflow on record, with $3.36 billion month-to-date (MTD).
In the first week of October, the investment products recorded a negative net flow of $147 million after the market’s performance weakened investors’ sentiment. However, crypto products recovered the following week with $407 million in inflows.
Last week, Bitcoin products led crypto products’ performance with $920 million in inflows. According to Farside Investors data, spot Bitcoin Exchange-Traded Funds (ETFs) saw $997.5 million in positive net flows. Meanwhile, short-Bitcoin positions saw outflows of $1.3 million, significantly decreasing from the $12 million inflows recorded the week prior.
Alongside Bitcoin, Solana-based products recorded the second largest inflows by asset, with $10.8 million added last week, seemingly fueled by the positive sentiment around 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
Regionally, the US led the products’ positive net flow with $906 million in inflows, likely tied 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 surge likely fueled by the Republican poll gains.
Similarly, IntoTheBlock recently revealed that Bitcoin’s price surge has been linked to Donald Trump’s chances of winning the November presidential elections. Trump, who is running as the Republican Party’s candidate, has embraced the crypto industry throughout his campaign.
The former US President’s crypto-friendly statements have been positively received by the sector with public support and crypto donations from industry figures. Moreover, the sector’s key support of pro-industry candidates has seemingly influenced the Democratic Party’s shift towards a more welcoming stance, with Kamala Harris’ campaign acknowledging the industry in various statements.
Several analysts have predicted a considerable surge in Bitcoin’s price in case of a Trump Victory. Meanwhile, experts have shared mixed opinions on the crypto market’s performance if the Democratic nominee wins the elections, with some suggesting it wouldn’t be “as bearish” as investors expect.
After the presidential debate, Donald Trump fell behind Harris in the prediction markets but recovered earlier this month, increasing his odds significantly in the last few weeks. According to Polymarket, Trump’s winning odds are 66%.
