tl;dr
Crypto inflows surged to nearly $2.2 billion last week, driven by the US elections and the Federal Open Market Committee meeting. This sharp increase brings the year-to-date inflows to a record $33.5 billion, with total assets under management reaching an all-time high of $138 billion. The spike is ...
Crypto Investment Inflows Near $2.2 Billion Crypto investment inflows surged to nearly $2.2 billion last week, driven by the US elections and the Federal Open Market Committee meeting. This sharp increase brings the year-to-date inflows to a record $33.5 billion, with total assets under management reaching an all-time high of $138 billion. The spike is attributed to factors such as the Federal Reserve's looser monetary policy and the GOP's success in the elections. Bitcoin dominated the inflows but experienced significant profit-taking, while Ethereum saw a rebound with $646 million in inflows.
The Republican victory is seen as favorable for cryptocurrency adoption, and market optimism is fueled by expectations of improved regulatory clarity under the new administration. Despite the strong inflows and Bitcoin's price surge, investor caution was evident in profit-taking later in the week. Regulatory developments and the Federal Reserve's policy will shape the market's trajectory, while support from newly elected pro-crypto lawmakers may provide the needed regulatory certainty.
The latest Coinshares report ascribes the spike in inflows to a confluence of factors, including the Federal Reserve’s looser monetary policy and a Republican (GOP) sweep in the recent US elections. Both developments have invigorated investor confidence in the digital asset market. Bitcoin accounted for $1.48 billion of last week’s inflows, highlighting its dominance in the digital asset space. However, its recent price surge to an all-time high triggered profit-taking, leading to $866 million in outflows during the latter half of the week. Notably, short Bitcoin products also saw $49 million in inflows, reflecting hedging activity by cautious investors.
Ethereum, which had struggled with outflows in previous weeks, rebounded strongly with $646 million in inflows. This resurgence is attributed to renewed investor optimism following Justin Drake’s Beam Chain upgrade proposal and the broader pro-crypto sentiment driven by the Republican victory.
The Republican Party’s clean sweep in the House and Senate has sent a clear signal to markets. With 274 pro-crypto candidates elected to the House and 20 to the Senate, the political playing field now appears increasingly favorable to cryptocurrency adoption. In contrast, only 122 anti-crypto lawmakers were elected to the House and 12 to the Senate, according to data from Stand With Crypto. Donald Trump’s pro-crypto stance also continues to fuel market optimism. Many expect regulatory clarity to improve under the new administration.
While the record-breaking inflows and Bitcoin’s price surge highlight growing confidence in the crypto market, the profit-taking trend observed later in the week highlights investor caution. Analysts suggest that the market’s trajectory will depend on regulatory developments and the Federal Reserve’s monetary policy in the coming months. Meanwhile, the political support from newly elected pro-crypto lawmakers could provide the regulatory certainty needed to sustain this momentum.