As a seasoned analyst with years of experience observing and deciphering market trends, I can confidently say that this year’s US presidential election is proving to be a pivotal moment for the crypto industry. The recent shift in prediction markets favoring Republican candidate Donald Trump has sparked a wave of investor confidence, particularly in digital assets.
As we approach the final stretch, with less than three weeks until the U.S. presidential election, the contest is reaching its critical stage, and the implications for the cryptocurrency sector are significant.
Lately, the chances of a victory for Republican and crypto-supporter Donald Trump, rather than his rival Vice President Kamala Harris from the Democratic party, have been increasing in prediction markets.
Over the last week, the change in political power towards the Republicans seems to have led to a surge of digital assets flowing into various platforms.
Political Climate Fuels Inflow Ahead of US Elections
As a researcher, I’ve recently discovered that, based on the latest edition of CoinShares’ “Digital Asset Fund Flows Weekly Report,” it appears that investors have directed approximately $407 million towards digital asset products. This investment trend seems to indicate a stronger focus on the upcoming US elections and the political climate rather than monetary policy concerns at this time.
In spite of surprising positive economic data, outflows persisted until a significant change occurred around the time of the U.S. vice presidential debate. This event corresponded with a swing in public opinion towards the Republican Party, which is perceived as being more supportive of digital assets, marking a pivotal moment.
This political change triggered an instant increase in investments and asset values. Consequently, the U.S. accounted for approximately $406 million of these investments, making it the largest contributor, while Canada was the next significant contributor, adding around $4.8 million. Similarly, Bitcoin‘s value surged past $66,000.
Additionally, Australia and Germany each experienced modest influxes totaling approximately $2 million and $0.8 million respectively during the last seven days.
Ethereum Emerges as Outlier
Bitcoin capitalized on recent political events, bringing in $419 million in inflows. In contrast, short-Bitcoin investment products saw outflows amounting to $6.3 million.
Instead of multi-asset investment products, let’s refer to them as diversified investment options. In the past 17 weeks, these options have seen inflows for the seventeenth week in a row, albeit with relatively small amounts totaling $1.5 million. Following this, XRP and Solana received investments of $1.1 million and $0.6 million respectively.
During that timeframe, Tron and Litecoin experienced inflows of approximately $0.2 million and $0.1 million respectively. In stark contrast, Ethereum bucked the trend, recording significant outflows amounting to about $9.8 million over the past week.
This year has seen significant investments into blockchain-based equity Exchange Traded Funds (ETFs), with a total inflow of approximately $34 million. This rise in funds could be attributed to the recent spike in Bitcoin’s price.
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2024-10-14 17:54