Crypto investment products saw a remarkable $407 million inflow between October 5-11, according to CoinShares‘ latest report. This marks a strong recovery from the $127 million sell-off the previous week. The inflows were largely driven by political factors surrounding the upcoming US elections rather than economic data or monetary policy changes.

Political factors outweigh monetary policy

“Republicans appear poised to take control of Senate, new poll shows,” from Oct. 10. 2024. Source: The New York Times

According to James Butterfill, head of research at CoinShares, political factors, notably the upcoming US elections, are the primary drivers of the recent inflows. Butterfill highlighted that “polling towards the Republicans,” perceived as more supportive of digital assets, provided a substantial boost to crypto prices and investments.

Bitcoin dominates inflows

Bitcoin was the standout asset, attracting $419 million in weekly inflows, positioning it as the “primary beneficiary” of these political shifts. Meanwhile, short-Bitcoin products saw outflows of $6.3 million, reflecting a more optimistic outlook on Bitcoin’s future. Blockchain equity ETFs also witnessed strong inflows of $34 million.

Ethereum sees continued outflows

Flows by assets (in millions of US dollars). Source: CoinShares

While Bitcoin surged, Ethereum struggled, with outflows totaling $9.8 million. Despite this, multi-asset investment products managed to record minor inflows of $1.5 million, continuing their positive streak for the 17th consecutive week.

As political uncertainty surrounding the US elections builds, the crypto market seems set for further volatility, with Bitcoin emerging as a key focus for investors.