The recent American electoral process has had a profound effect on the digital currency landscape, driving a surge in investor participation.
In the latest report by CoinShares, it was highlighted that global investments in cryptocurrencies experienced a remarkable influx of $2.19 billion in the past week, bringing the year-to-date (YTD) net inflows to an unprecedented $33.5 billion.
This trend coincided with Bitcoin [BTC] soaring to a historic high of $93,477, pushing the total assets under management (AUM) for crypto funds to an estimated $138 billion.
James Butterfill, Head of Research at CoinShares, observed,
“The recent surge in activity seems to be a result of both looser monetary policies and the Republican party’s sweeping victory in the recent US elections.”
Rise in Crypto Inflows
The report indicated a dynamic period for crypto investment products. Initially, inflows reached $3 billion, but following Bitcoin’s record-breaking achievement, significant profit withdrawals ensued.
Despite this, investments in Bitcoin-centric products attracted $1.48 billion, while Ethereum [ETH] products received $646 million in inflows.
In a different scenario, products associated with various cryptocurrencies encountered $19.4 million in outflows, with Binance’s BNB products seeing outflows of $400,000.
Since the interest rate adjustments in September, total inflows have reached $11.7 billion.
The report pointed out that this surge can be partially attributed to the impact of more relaxed monetary policies and the decisive victory of the Republican Party in the recent US elections, signaling a significant change in market sentiment.
Bitcoin ETF Continues to Dominate
As anticipated, Bitcoin maintained its dominant position in the market, drawing $1.48 billion in inflows, mainly fueled by the strong performance of US-based spot ETFs.
Data from CoinShares highlighted the contributions from BlackRock’s IBIT, bringing in $2.1 billion, and Fidelity’s FBTC, attracting $4 million in inflows. Meanwhile, funds like Ark 21Shares and Grayscale experienced outflows of $153 million and $108 million, respectively.
Bitcoin’s surge beyond $90,000 also led to a negative sentiment in the market, resulting in investments of $49 million in short Bitcoin products.
Ethereum followed suit, securing $646 million in inflows, credited to the election outcomes and excitement surrounding the Beam Chain upgrade.
Other alternative coins such as Solana [SOL], Ripple [XRP], and Cardano [ADA] also saw steady interest, with inflows amounting to $24 million, $4.3 million, and $3.4 million, respectively, indicating ongoing diversification in investor portfolios.
To sum up, Butterfill captured the essence of the situation by stating,
“The upcoming years may experience an unparalleled level of institutional backing, increased governmental interest, and wider public adoption, paving the way for Bitcoin to further solidify its position in the global financial realm.”