Global Crypto Funds Inflows

Global crypto funds managed by firms like BlackRock, Bitwise, Fidelity, Grayscale, ProShares, and 21Shares reported net inflows of $2.2 billion last week, marking the largest increase since July, as per CoinShares.

CoinShares Head of Research, James Butterfill, suggested this renewed optimism arises from heightened expectations for a Republican victory in the upcoming U.S. elections, which are generally seen as more favorable towards digital assets. This has resulted in positive price momentum, with trading volume for investment products increasing by 30% for the week and total assets under management nearing the $100 billion mark globally.

Political Context

As per the decentralized predictions platform Polymarket, Republican candidate Donald Trump currently leads Democrat Kamala Harris with odds of 61.5% to 38.6% to win the presidential election on Nov. 5. Trump holds the lead in all six swing states, with Polymarket showing an 82% likelihood of a Republican Senate, 51% for a Democrat House, and 43% for a Republican sweep versus 14% for the Democrats.

Despite these trends, recent national polls from Bernstein indicate a tight race, showing Harris with only a 2% advantage within the margin of error.

Regional Fund Flow Analysis

While U.S.-based funds dominate the market, regional flows tell a different story. U.S. investment products experienced $2.3 billion in net inflows, whereas funds from nearly every other country saw net outflows, including Canada, Sweden, and Switzerland, which lost $19.9 million, $18.2 million, and $14.9 million, respectively.

Bitcoin-based products were the primary beneficiaries, with U.S. spot Bitcoin exchange-traded funds adding $2.1 billion last week. BlackRock’s IBIT ETF alone generated over $1.1 billion, with ETFs averaging $426 million in net inflows per day during the week.

These inflows marked the largest since the $2.6 billion reported in March when Bitcoin approached its all-time high of nearly $74,000. Since trading began in January, cumulative net inflows into these funds have peaked at nearly $21 billion, while assets under management reached a record of over $66 billion.

Bitcoin is currently valued at $68,307, up 5.4% in the past week. Interestingly, this rise also attracted $12 million in net inflows into short bitcoin investment products, marking the largest influx since March, according to Butterfill.

Other cryptocurrencies like Ethereum, Solana, Litecoin, and XRP also saw net inflows globally, attracting $58 million, $2.4 million, $1.7 million, and $0.7 million, respectively. However, multi-asset products faced net outflows of $5.3 million, ending a 17-week streak of inflows.

Additionally, the GMCI 30 index, which tracks the top 30 cryptocurrencies, has risen approximately 9% over the last week to 127.26.