Main Points:
- Cryptocurrency investment products saw inflows of $2.2 billion, the largest since July.
- The optimism stems from expectations of a Republican victory in the upcoming U.S. elections.
- The U.S. leads the inflows with $2.3 billion, while other regions like Canada and Sweden experienced outflows.
- Bitcoin was the biggest winner, with $2.13 billion in inflows.
- The recent inflows align with the usual “Uptober” trend seen in the cryptocurrency market.
U.S. Election Optimism Drives Record Inflows
Cryptocurrency investment products have seen a remarkable surge in inflows, reaching $2.2 billion in just one week, the largest figure since July. According to a report by CoinShares, the optimism surrounding the upcoming U.S. elections, particularly the possibility of a Republican victory, has fueled this increase. The report highlights that Republican candidates are generally perceived as more favorable toward digital assets, driving confidence in the market.
James Butterfill, head of research at CoinShares, explained, “This newfound optimism is attributed to the growing expectations of a Republican victory in the upcoming U.S. elections, as they are seen as more supportive of digital assets.”
U.S. Leads with $2.3 Billion Inflows
From October 12 to October 18, the U.S. saw a dramatic rise in cryptocurrency investment, accounting for $2.3 billion in inflows. This was in stark contrast to other regions like Canada and Sweden, which witnessed outflows of $19.9 million and $18.2 million, respectively. Australia was the only other region to record positive inflows, with $1.4 million.
CoinShares suggests that the outflows in regions like Canada reflect profit-taking amid the bullish market led by the U.S. “These inflows have driven prices higher, leading to a 30% increase in trading volumes, bringing total assets under management close to $100 billion,” Butterfill added.
Bitcoin Dominates with $2.13 Billion Inflows
Among all digital investment products, Bitcoin (BTC) emerged as the clear winner, recording $2.13 billion in inflows. The largest share of this came from BlackRock’s iShares Bitcoin ETF, which alone attracted $1.19 billion. Ethereum (ETH) products also performed well, with inflows of $58 million, while short Bitcoin positions saw $12 million in inflows, the highest since March.
Multi-asset cryptocurrency products, however, recorded an outflow of $5.3 million, ending a 17-week streak of consecutive inflows. Despite this, the total inflows for October have already reached $2.4 billion, aligning with the “Uptober” trend—a term used to describe the historically bullish behavior of the cryptocurrency market in October.
Market Set for Continued Growth
The strong inflows into cryptocurrency products, particularly Bitcoin, reflect growing market optimism fueled by U.S. election expectations. With assets under management nearing $100 billion, and the “Uptober” trend providing further momentum, the market is set for continued growth in the coming months.
