US election hopes spark three-month high inflow of over $2 billion in crypto investments

Global digital asset investment products saw their inflows hit a three-month high of $2.2 billion last week — the largest weekly inflow since July— amid optimism surrounding the upcoming US elections, according to CoinShares’ latest weekly report.

James Butterfill, Head of Research at CoinShares, attributed the surge to expectations from betting markets that the Republican party, which is perceived as more supportive of cryptocurrencies, could win the election.

He wrote:

“We believe this renewed optimism stems from growing expectations of a Republican victory in the upcoming US elections, as they are generally viewed as more supportive of digital assets.”

According to data from Polymarket, a blockchain-based prediction market, Republican presidential candidate Donald Trump has a 61% chance of winning the elections, while the party also has a 43% chance of sweeping the votes.

This positive sentiment led to a 30% increase in trading volumes, pushing the value of assets under management (AUM) to nearly $100 billion.

Bitcoin leads, Ethereum follows

During the reporting period, CoinShares revealed the surge is largely due to significant investments in US-traded Bitcoin ETFs. Inflows into the spot Bitcoin ETFs reached $2.13 billion after six consecutive days of positive growth. This is the first time weekly inflows into Bitcoin ETFs have exceeded $2 billion since March 2024.

While US ETPs drew inflows, crypto products in regions like Canada, Sweden, and Switzerland saw $20 million, $18 million, and $15 million in outflows, respectively. Butterfill explained that these withdrawals could be linked to “minor profit taking outside the US.”

Meanwhile, Bitcoin’s potential rally toward the $70,000 mark has attracted short traders. Investors with a bearish outlook poured $12 million into Short Bitcoin products, reflecting caution in the market.

Ethereum broke its trend of outflows, recording $58 million in inflows. This brought the digital asset’s month-to-date flow to $22.5 million, while it has attracted $783 million in inflows since the beginning of the year.

Other significant alternative assets also saw gains, with Solana, Litecoin, and XRP posting inflows of $2.4 million, $1.7 million, and $700,000, respectively.

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