Election Euphoria Sparks $2.2 Billion Inflows, Bitcoin as Sole Beneficiary

The excitement surrounding the potential Republican victory has led to substantial inflows into the cryptocurrency market, totaling $2.2 billion in just one week. This surge has pushed the year-to-date inflows to an impressive $29.2 billion, contributing to a total assets under management (AuM) that has surpassed $100 billion. The last time AuM was this high was in early June 2024, when it reached $102 billion.

• Trading Volume Surge: The trading volume also saw a notable increase of 67% over the week, reaching $19.2 billion, which accounted for 35% of all Bitcoin trading on reputable exchanges.

Bitcoin Dominates Inflows

According to the latest Digital Asset Fund Flows Weekly report, nearly all of the recent inflows were directed towards Bitcoin, which attracted the entire $2.2 billion. In contrast, short-bitcoin investments saw a minor inflow of $8.9 million.

• Ethereum and Other Altcoins: Ethereum managed to draw in only $9.5 million, while Solana saw inflows of $5.7 million. Other altcoins like Polkadot and Arbitrum recorded modest inflows of $0.67 million and $0.2 million, respectively.

• Outflows in Multi-Asset Products: Multi-asset products experienced outflows of $3.1 million, following a recovery the previous week. Litecoin and XRP also faced outflows of $0.8 million and $0.1 million, respectively.

Impact of U.S. Elections on Bitcoin

Bitcoin's recent rally can be attributed to the optimism surrounding Donald Trump, a self-identified pro-crypto candidate, potentially securing a second term. Traders have been placing significant bets on Trump's chances, as highlighted in a recent report.

• Market Sensitivity: The CoinShares report confirmed that weekly inflows in the U.S. reached $2.2 billion, driven by early-week excitement over Republican election prospects. However, slight outflows on Friday indicated Bitcoin's sensitivity to shifts in polling.

Global Inflows and Outflows

On a global scale, Germany recorded smaller inflows of $5.1 million, while Australia and Hong Kong saw inflows of $2.1 million and $0.7 million, respectively. Conversely, Canada and Sweden reported the largest outflows, with $24.4 million and $20.3 million, followed by Switzerland with $13.8 million. Brazil also experienced a minor outflow of $0.5 million.

The current election euphoria has significantly influenced cryptocurrency inflows, with Bitcoin emerging as the primary beneficiary. As the political landscape evolves, market participants will continue to monitor the implications for digital assets.