Investment inflows into cryptocurrencies soared to $2.2 billion last week, marking the highest level since July 2023. Analysts attribute this increase to growing optimism regarding a possible Republican victory in the forthcoming US elections.
This shift in political landscape has enhanced both investor confidence and market valuations.
Crypto Inflows Reach Multi-Month Highs Amid US Election Anticipation
Following a week that saw $407 million in positive flows by October 11, digital asset investment inflows hit $2.2 billion last week. This indicates a fivefold growth week-over-week, with Bitcoin leading the charge at $2.13 billion.
Meanwhile, Ethereum experienced positive flows of $57.5 million, while multi-asset inflows saw a break in their 17-week streak with $5.3 million in outflows.
Similar to the previous week, analysts from CoinShares point to increasing interest due to the upcoming US elections, as the US accounted for inflows totaling $2.3 billion.
“We believe this renewed optimism stems from rising expectations of a Republican victory in the upcoming US elections, as they are generally perceived to be more favorable towards digital assets. This has led to a positive price momentum,” a passage in the report stated.
Read more: How Can Blockchain Be Used for Voting in 2024?
According to CoinShares researchers, this reflects an escalating interest in cryptocurrency investments within the nation, especially as the US election countdown nears its conclusion with only 15 days remaining. Pro-crypto candidate Donald Trump reportedly leads with a 22.9 percentage point advantage over Kamala Harris, according to Polymarket.
With the Republican candidate often seen as a supporter of the cryptocurrency industry, there is a prevailing sentiment that a potential Donald Trump win could pave the way for more crypto-friendly regulations.
As previously reported by BeInCrypto, the Republican presidential hopeful aims to reform US cryptocurrency regulations beyond the current scope outlined by Gary Gensler. Such measures could further stimulate market growth amid expectations that the party may introduce favorable policies for the cryptocurrency sector.
As the countdown progresses, interest in crypto is on the rise. The report noted a 30% jump in trading volumes for digital asset investment products last week. The increase in trading activity, combined with escalating asset prices, has brought total assets under management (AUM) in the digital asset sector to nearly $100 billion.
If this current trend continues, the market could soon surpass this threshold. Additionally, crypto investment inflows may rise this week compared to last.
“A favorable regulatory environment could unleash significant institutional investments. If the US experiences a change in leadership that is pro-crypto innovation, it could result in clear guidelines for crypto firms, a potential green light for ETFs, and bolstered institutional confidence, leading to a surge of new capital entering crypto markets,” an analyst noted on X (formerly Twitter).
Read more: How To Buy Bitcoin (BTC) and Everything You Need To Know
Meanwhile, BeInCrypto data indicates that Bitcoin is eyeing the $70,000 psychological barrier, currently trading at $68,210 as of this writing.
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