Investors are turning to digital assets in record
numbers amid the uncertainty related to the US elections. Currently, the market appears to be influenced more by political factors than the outlook on monetary policy, with a US$407 million inflow into digital asset investment products.
This is according to CoinShares’ report highlighting
digital asset fund flows. A surprising turn in the opinion polls, favoring Republicans
who are perceived as more supportive of digital assets, has reportedly boosted
Bitcoin and blockchain-related investments.
Bitcoin
Bitcoin experienced inflows of US$419 million, marking
a significant uptick as investors responded to the political shifts in the US.
With the upcoming elections creating a potential turning point in how digital
assets are regulated and perceived, the top crypto is attracting more investors
seeking to hedge against uncertainty.
Conversely, short-Bitcoin products, which are designed
to profit from declines in Bitcoin’s price, saw US$6.3 million in outflows.
This indicates that market participants expect Bitcoin‘s price to rise, likely
driven by political developments.
📈 Digital asset investment products saw inflows of US$407m, #Bitcoin saw inflows totalling US$419m while blockchain equity ETFs saw one of the largest weekly inflows of the year, totalling US$34m. Get our insights in our full report: https://t.co/3Bz2pA1HOQ pic.twitter.com/kvkSHAqIHo
— CoinShares (@CoinSharesCo) October 14, 2024
The US was overwhelmingly the primary source of the
inflows, accounting for US$406 million of the total. Canada, although much
smaller in scale, also saw a positive trend, recording inflows of US$4.8
million.
While Bitcoin saw a massive uptick in inflows, other
digital assets painted a more mixed picture. Ethereum, the second-largest
cryptocurrency, continued its trend of outflows, recording US$9.8 million in
withdrawals. This suggests that despite Bitcoin’s success, Ethereum
is facing headwinds, possibly due to its different use cases and investor base.
ETFs
On the other hand, multi-asset investment products
experienced a smaller but consistent inflow of US$1.5 million, marking the 17th
consecutive week of positive inflows. These products, which typically offer
exposure to a basket of digital assets, may appeal to investors seeking
diversification.
Blockchain-related equity exchange-traded funds (ETFs)
also had a strong week, pulling in US$34 million—their largest inflow this
year. This is likely a result of Bitcoin’s recent price increase, which has
reignited interest in blockchain technology and the companies building on it.
A separate report recently released by eToro showed that nearly half of American retail investors are adjusting their portfolios ahead of the November polls. The research added that investors are boosting their cash reserves while others are targeting opportunities in equities and digital assets.
This article was written by Jared Kirui at www.financemagnates.com.
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