The recent presidential election in the United States has had a profound impact on the digital currency market, igniting a surge in investor engagement.
According to the latest report from CoinShares, global cryptocurrency investment products experienced a remarkable influx of $2.19 billion just last week, pushing year-to-date (YTD) net inflows to an unparalleled $33.5 billion.
This surge in activity coincided with Bitcoin [BTC] reaching a historic high of $93,477, driving the total assets under management (AUM) for crypto funds to an estimated $138 billion.
James Butterfill, Head of Research at CoinShares, commented on this noteworthy development, stating,
“The recent spike in activity seems to be fueled by a blend of more relaxed monetary policies and the Republican party’s decisive victory in the recent US elections.”
Surge in Cryptocurrency Inflows
The latest report unveiled a dynamic period for cryptocurrency investment products. Initially, inflows soared to $3 billion, but the new all-time high for Bitcoin triggered substantial profit-taking, leading to outflows.
Despite this, Bitcoin-focused investment products attracted $1.48 billion, while Ethereum [ETH] products saw inflows of $646 million.
In contrast, products associated with a variety of cryptocurrencies faced outflows of $19.4 million, with Binance’s BNB products experiencing $400,000 in outflows.
Since the interest rate cuts in September, total inflows have reached $11.7 billion, a significant development noted in the report.
This surge in inflows is attributed to the impact of looser monetary policies and the Republican Party’s sweeping victory in the recent U.S. elections, indicating a noticeable shift in market sentiment.
Bitcoin ETF Dominance Persists
As anticipated, Bitcoin maintained its dominance in the market, drawing $1.48 billion in inflows, largely propelled by the strong performance of U.S.-based spot ETFs.
Data from CoinShares highlighted contributions from BlackRock’s IBIT with $2.1 billion and Fidelity’s FBTC with $4 million in inflows. Meanwhile, funds like Ark 21Shares and Grayscale experienced outflows of $153 million and $108 million, respectively.
Bitcoin’s surge past $90,000 also sparked bearish sentiment, leading to $49 million in investments in short Bitcoin products.
Ethereum followed closely, securing $646 million in inflows, attributed to the election outcomes and excitement surrounding the Beam Chain upgrade.
Other alternative coins like Solana [SOL], Ripple [XRP], and Cardano [ADA] garnered sustained interest, with inflows amounting to $24 million, $4.3 million, and $3.4 million, respectively, signaling a continued expansion in investor portfolios.
In conclusion, Butterfill expressed optimism by stating,
“The coming years may witness an unparalleled level of institutional support, heightened government interest, and broader public acceptance, paving the way for Bitcoin to further establish its position in the global financial landscape.”