Cryptocurrency-based investment products continued their positive streak after recording nearly $1 billion in inflows this week, apparently driven by the upcoming US presidential election. Bitcoin (BTC) led net positive inflows for the third week in a row, making October the fourth-largest month of crypto investment product inflows ever.
Bitcoin leads crypto investment product flows
On Monday, CoinShares published Its weekly report on digital asset fund flows reveals that digital asset fund flows reached $901 million last week. Although it represents a 59% decline from the $2.2 billion recorded in the previous week, cryptocurrency-based products maintain a three-week streak of positive net inflows.
Following this week’s performance, year-to-date product inflows reached $27 billion, nearly triple 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 fourth-largest monthly flow ever, at $3.36 billion year-to-date (MTD).
Weekly Crypto Asset Flows: Source: CoinShares
In the first week of October, investment products recorded negative net inflow of $147 million after market performance dampened investor sentiment. However, cryptocurrency products recovered the following week with inflows of $407 million.
Last week, Bitcoin products led the performance of cryptocurrency products with inflows of $920 million. According to data from Farside Investors, Bitcoin exchange-traded funds (ETFs) opinion $997.5 million net positive flows. Meanwhile, Bitcoin short positions saw outflows of $1.3 million, down significantly from the $12 million inflows recorded the previous week.
Along with Bitcoin, Solana-based products recorded the second-largest inflows in terms of assets, with $10.8 million added last week, apparently driven by positive sentiment around the cryptocurrency.
However, Ethereum products moved in the opposite direction, seeing the largest outflows of any asset last week at $35 million. This performance appears to be driven by overall negative investor sentiment towards the asset, and contrasts with the $58 million inflows recorded the previous week.
The impact of US policy on the performance of cryptocurrency products
Regionally, the United States led the net positive product flow with inflows of $906 million, likely related to the upcoming November elections. According to CoinShares, Bitcoin’s current price action and flows are heavily influenced by US politics, and the rise this month is likely driven by Republican poll gains.
Likewise, IntoTheBlock recently revealed that Bitcoin’s price rise is linked to Donald Trump’s chances of winning the presidential election in November. Trump, who is running as the Republican Party’s nominee, has embraced the cryptocurrency industry throughout his campaign.
The former US President’s cryptocurrency-friendly statements have been received positively by the sector with public support and cryptocurrency donations from industry figures. Furthermore, the sector’s mainstream support for pro-industry candidates appears to have influenced the Democratic Party’s shift toward a more hospitable stance, with Kamala Harris’ campaign acknowledging the industry in various statements.
Many analysts predicted a significant rise in the price of Bitcoin in the event of a Trump victory. Meanwhile, experts shared mixed opinions on how the cryptocurrency market will perform if the Democratic candidate wins the election, with some noting that it will not be as “bearish” as investors expect.
After the presidential debate, Donald Trump fell behind Harris in prediction markets but recovered earlier this month, increasing his odds significantly in the past few weeks. According to Polymarket, Trump Odds of winning It is 66%.
Bitcoin (BTC) is trading at $68,930 in the weekly chart. Source: BTCUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com