Digital asset investment products, especially Bitcoin, have returned to positive capital flows globally last week, driven by the political shift towards the Republican party ahead of the US presidential election.
According to CoinShares, the net capital inflows into global cryptocurrency funds managed by asset managers like BlackRock, Bitwise, Fidelity, Grayscale, ProShares and 21Shares have returned to a net inflow of $407 million last week.
James Butterfill, Head of Research at CoinShares, said that recent investor decisions may have been more influenced by the upcoming US election than monetary policy prospects. "This trend is clearly evident in that stronger-than-expected economic data has had little impact in stemming outflows, while the recent US vice presidential debate and the subsequent shift in voting towards the Republican party, seen as more supportive of digital assets, has led to inflows and prices rising immediately," he said.
According to Butterfill's view, US-based funds dominated last week's net inflows, adding $406 million - potentially due to the current political nature of the capital flows. The only other notable net inflow was $4.8 million into Canadian cryptocurrency investment products, while funds elsewhere mostly saw net outflows.
Republican candidate Donald Trump is currently leading Kamala Harris of the Democratic party with a 54% to 45.4% chance of winning the presidential election on November 5, according to the decentralized prediction platform Polymarket - with the former President also leading in 5 out of 6 swing states.
Additionally, Polymarket shows a 78% chance of a Republican Senate, a 56% chance of a Democratic House, and a 38% chance of a Republican victory compared to 17% for the Democrats.
Butterfill said that Bitcoin-based investment products saw net inflows of up to $419 million last week, making it the "main beneficiary of the recent political changes". Bitcoin short investment funds also saw net outflows of $6.3 million last week.
Ending the week with over $200 million in positive capital flows on both Monday and Friday last week, US-based spot Bitcoin ETFs accounted for $348.5 million in net inflows despite recording daily net outflows.
According to The Block's data dashboard, BlackRock's IBIT Spot Bitcoin ETF led the inflows, adding $140.6 million, while Grayscale's higher-fee converted GBTC product recorded $31.5 million in net inflows.
Multi-asset investment products also performed well, marking the 17th consecutive week of net inflows, albeit a modest $1.5 million. Furthermore, blockchain equity ETFs saw one of their largest weekly inflows of the year, bringing in $34 million - potentially in response to the recent Bitcoin price surge.
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The article Bitcoin has $419 million in inflows, driven by the US presidential election first appeared on CoinMoi.
