The cryptocurrency market has been booming, with a total of $27 billion in inflows recorded in 2024. Just last week, there was a significant influx of $901 million into crypto investment products. This surge in investment comes at a time when the US political climate is creating a heightened demand for digital assets.
BlackRock’s Bitcoin ETF has been a major player in driving these inflows, with a total of $998 million flowing into spot BTC ETFs led by IBIT. Bitcoin, in particular, attracted the majority of these inflows, totaling $920 million. On the other hand, short-Bitcoin products saw a slight outflow of $1.3 million.
James Butterfill, the Head of Research at CoinShares, pointed out that US politics are playing a significant role in shaping Bitcoin flows and prices. The recent surge in inflows is believed to be linked to the Republicans’ improved polling numbers. With the US election on the horizon, both major candidates, former President Donald Trump and Vice President Kamala Harris, are actively engaging with crypto supporters by promoting pro-crypto policies to appeal to this growing voter base.
Data from the decentralized betting platform Polymarket indicate that crypto investors are leaning towards Trump, who currently has a 65% chance of winning, while Harris’s odds have dropped to 35%. This suggests that the crypto community sees Trump as a more favorable candidate when it comes to crypto-related policies.
While Bitcoin continues to attract significant inflows, Ethereum experienced outflows totaling $35 million last week, marking the largest outflow for any digital asset. This can be attributed to slower performance in Ethereum-based ETFs and the ongoing price struggles of ETH compared to BTC. Ethereum is currently down 55% from its recent peak.
On the other hand, Solana saw the second-highest inflow at $10.8 million, followed by Litecoin with $1.8 million. The broader blockchain equities market also showed a positive trend, with inflows recorded for the third consecutive week, totaling $12.2 million last week.
Overall, the cryptocurrency market is experiencing a surge in investment, driven by the US political climate and the growing demand for digital assets. With the upcoming election, it will be interesting to see how these trends continue to unfold and impact the market in the coming weeks.