Political shift to Republicans drives $407 million in weekly inflows to crypto funds, CoinShares says

Net inflows into global crypto funds run by asset managers such as BlackRock, Bitwise, Fidelity, Grayscale, ProShares and 21Shares returned to net inflows of $407 million last week following $147 million worth of outflows the week prior, according to CoinShares.

Recent investor decisions have likely been more influenced by the upcoming U.S. elections than monetary policy outlooks, CoinShares Head of Research James Butterfill noted on Monday. “This trend is evident in the fact that stronger-than-expected economic data had little impact on stemming outflows, whereas the recent U.S. vice presidential debate and a subsequent shift in polling towards the Republicans, perceived as more supportive of digital assets, led to an immediate boost in inflows and prices,” he said.

U.S.-based funds dominated last week’s net inflows, adding $406 million—likely due to the current political nature of the flows, in Butterfill’s view. Canadian crypto investment products recorded the only other notable net inflow of $4.8 million, while funds based elsewhere mainly witnessed net outflows.

Weekly crypto asset flows. Images: CoinShares.

Republican candidate Donald Trump currently leads Democrat Kamala Harris by odds of 54% to 45.4% to win the presidential election on Nov. 5, according to the decentralized predictions platform Polymarket — with the former President also taking the lead in five of six swing states.

Additionally, Polymarket shows 78% odds of a Republican Senate, 56% odds of a Democrat House and a 38% chance of a Republican sweep compared to 17% for the Democrats.

Bitcoin and multi-asset investment products lead the way

Bitcoin BTC +2.84% -based investment products witnessed net inflows totaling $419 million for the week, making it the “primary beneficiary of recent political shifts,” Butterfill said. Short-bitcoin funds also saw $6.3 million in net outflows last week.

Bookending the week with more than $200 million worth of positive flows on Monday and Friday last week, the U.S. spot Bitcoin exchange-traded funds accounted for $348.5 million in net inflows despite registering net daily outflows from Tuesday to Thursday.

BlackRock’s IBIT spot Bitcoin ETF led the flows, adding $140.6 million, while Grayscale’s converted and higher-fee GBTC product registered $31.5 million in net outflows, according to The Block’s data dashboard.

Bitcoin is currently trading for $64,379, according to The Block's Bitcoin Price Page —  up 2.6% over the last 24 hours and 1.7% over the past week.

Multi-asset investment products also fared well, marking their 17th consecutive week of net inflows, albeit a modest $1.5 million worth. Furthermore, blockchain equity ETFs witnessed one of the largest weekly inflows of the year, bringing in $34 million — likely in response to recent bitcoin price rises, Butterfill added.

However, Ethereum ETH +2.45% -based products continued their negative spell, with $9.8 million exiting the funds globally last week, despite $1.9 million in net inflows to the U.S. spot Ethereum ETFs.

The  GMCI 30 index, which represents a selection of the top 30 cryptocurrencies, gained 2% during the past 24 hours to 120.16 and has risen around 18% over the past seven days.