U.S. election hopes drive three-month high inflows of over $2 billion in cryptocurrency investment

Global investment product inflows into digital assets hit a three-month high of $2.2 billion last week – the biggest weekly inflow since July – amid optimism about the upcoming US election, according to CoinShares’ latest weekly report.

James Butterfill, head of research at CoinShares, attributed the surge to betting markets’ expectations that the Republican Party, seen as more pro-crypto, could win the election.

He wrote:

“We believe this new optimism stems from rising expectations of a Republican victory in the upcoming US elections, as they are generally seen as more favorable to digital assets.”

According to Polymarket, a blockchain-based prediction market, Republican presidential candidate Donald Trump has a 61% chance of winning the election, while the party also has a 43% chance of winning the vote.

This positive sentiment led to a 30% increase in trading volumes, bringing assets under management (AUM) to nearly $100 billion.

Bitcoin Leads, Ethereum Follows

During the reporting period, CoinShares found that this surge was largely driven by significant investment in US-traded Bitcoin ETFs. Inflows into spot Bitcoin ETFs reached $2.13 billion after six straight days of positive growth. For the first time since March 2024, weekly inflows into a Bitcoin ETF exceeded $2 billion.

While ETPs in the US attracted inflows, cryptocurrency products in regions such as Canada, Sweden and Switzerland saw outflows of $20 million, $18 million and $15 million respectively. Butterfill explained that these payments may be related to “the recording of minor profits outside the United States.”

Meanwhile, Bitcoin’s potential rally towards the $70,000 mark has attracted short traders. Bearish investors poured $12 million into short Bitcoin products, reflecting caution in the market.

Ethereum broke the outflow trend by recording inflows of $58 million. This brings the digital asset to $22.5 million in monthly inflows and has raised $783 million year-to-date.

Other significant alternative assets also saw gains, with Solana, Litecoin and XRP inflows of $2.4 million, $1.7 million and $700,000 respectively.

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