Crypto Products See $2.2 Billion Inflow, Boosted by U.S. Election Developments

CoinShares, a leading digital asset manager, reported a significant influx of institutional investment into crypto products last week, with inflows reaching up to $2.2 billion. This marks a 15% increase from the previous week’s $1.98 billion.

The recent U.S. Election, held on November 5, is believed to have played a pivotal role in driving this surge. As of November 18, total inflows into digital assets for the year had hit $33.5 billion, with assets under management (AUM) soaring to a new peak of $138 billion.

Bitcoin (BTC) led the pack, attracting the largest share of inflows at $1.48 billion, or 67% of the total. Ethereum (ETH) followed with $646 million, and Solana (SOL) saw a more modest $23.9 million. Notably, Ethereum’s inflows saw a notable uptick following the Beam Chain network upgrade proposal by Justin Drake, which helped boost Ethereum’s inflows by $157 million.

Interestingly, only multi-asset products and Binance Coin (BNB) experienced outflows during the week, with the latter recording a decrease ranging from $8 million to $153 million, including outflows from Grayscale and Fidelity.

BlackRock's Bitcoin ETF Leads the Inflow Surge

The biggest beneficiary of last week’s inflows was BlackRock’s iShares Bitcoin Trust ETF (IBIT), which saw a surge of 63%, or $2.1 billion. In contrast, most other crypto products saw relatively smaller outflows.

U.S. Election Results Fuel Positive Sentiment for Crypto

James Butterfill, Head of Research at CoinShares, attributes the recent surge to a combination of factors, including the U.S. election and expectations of looser monetary policies. Butterfill suggests that the prospect of a Republican majority in Congress, along with a potential second term for former President Donald Trump, is positively influencing the crypto market. He pointed out that Trump’s administration could bring crypto-friendly regulations and fiscal policies, boosting investor confidence.

Several key figures who have supported crypto, such as Elon Musk, Tom Emmer, and Robert F. Kennedy Jr., has been suggested as potential appointees for positions in a second Trump administration, further bolstering the outlook for the industry. Additionally, legislative efforts like the proposed Bitcoin Act by Republican Senator Cynthia Lummis and the Bitcoin Strategic Reserve are seen as catalysts that could support Bitcoin’s future potential.

Overall, the combination of favorable political developments and continued institutional interest in crypto is driving optimism for the market’s future.