Digital asset investment products have seen $407 million inflows due to the changes in the U.S. election polls. The current shift of many investors in the US Congress, which had been seen as friendlier towards Donald Trump and thus towards cryptocurrencies, has led many people to increase their investments in digital currencies like Bitcoin.
More than half of the overall inflow has gone to Bitcoin, with other blockchain equity ETFs also participating in this trend.
Bitcoin Sees Major Inflows Amid Political Shifts
Bitcoin received $419 million inflows in the week, which makes it the most sought after asset class in the digital assets market. This growth occurred in parallel with the growth of surveys of the electoral race for the President of the United States of America where Donald Trump was considered more positive towards digital currencies.
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Investors are expecting the new administration to alter the legal and regulatory environment and other political risks.
This is especially the case for inflows into Bitcoin, especially given that other cryptocurrencies, including Ethereum, are still witnessing outflows. While Bitcoin was receiving a lot of attention, Ethereum experienced withdrawal of $9.8 million, indicating that investors had different views for the two largest cryptocurrencies.
Short BTC Products Experience Outflows
On the other hand, short Bitcoin products created to make money when the price of Bitcoin was going down recorded outflows of $6.3 million. This shift implies that investors are positive about the future of Bitcoin’s price, and the positive change may be due to US politics.
Of the $407 million in investment, U.S. investors were the biggest investor with an investment of $406 million while Canadian investors also invested $4.8 million. This shows how the political environment in the United States is not only disturbing domestic markets but also eliciting interest in digital assets from the international market.
Interest in Bitcoin has also spread to other blockchain-based equity ETFs, which attracted investments of $34 million. This is one of the largest weekly flows into these products this year. The resurgence of interest in blockchain technology due to the increased price of Bitcoin has made investors look for companies that support and develop the infrastructure of digital assets.
The $34 million inflow into blockchain ETFs shows that more and more people are realizing the value of blockchain and its relevance to the rest of the digital asset space. As Bitcoin’s price rises, investors are exploring ways to invest in the crypto market beyond direct investments in digital currencies, which include investing in companies that work on Blockchain technology.
Political Uncertainty Drives Investment Decisions
The upcoming U.S. elections have been instrumental in the recent investment actions in the digital asset market. Market players are preparing for Donald Trump’s victory, which can result in a more positive perception of cryptocurrencies by the regulator. Movement in the polls following the most recent vice-presidential debate has affected both the price of Bitcoin and the attitude of investors.
Although economic data usually affect asset flows, the present flow into digital assets has been more political in nature. As we approach the US elections in November, political considerations have replaced concerns related to monetary policy as the main reason for these huge investments in Bitcoin and similar Bitcoin products.
Another report from eToro showed that many American retail investors are rebalancing their portfolios in anticipation of the election. With the political situation still somewhat unclear, more and more people are buying cryptocurrencies, using them to protect their investments in case of economic turmoil.