The US economy was the driving narrative for crypto investment flows over the past several weeks. However, this may be changing as the countdown to the US elections intensifies.
Inflows into digital asset investment products reached $407 million last week, overshadowing negative flows seen during the first week of October.
Crypto Investment Inflows Restored After Early October Gloom
In the first week of October, cryptocurrency investment flows saw a significant downturn, recording a negative $147 million and ending a streak of positive inflows that began on September 9. During this period, investors shifted focus to the broader US economy, opting for multi-asset investments.
However, a new catalyst has emerged — the upcoming US presidential elections. This evolving narrative is expected to drive crypto inflows. Bitcoin capitalized on this sentiment shift, leading digital asset investment products with $419 million in inflows last week.
“Digital asset investment products saw inflows of US$407 million, as investor decisions have likely been more influenced by the upcoming US elections than by monetary policy outlooks,” the report read.
Read more: How to Protect Yourself From Inflation Using Cryptocurrency
The report reached this conclusion after “stronger-than-expected economic data had little impact on stemming outflows” during the first week of October. Crypto investment flows came in negative despite positive non-farm payroll jobs in September, surpassing economists’ predictions.
The unemployment rate has dropped unexpectedly, adding to the ongoing economic surprises. At the same time, Bitcoin’s rally and strong inflows demonstrate that markets are reacting to developments in the political scene.
“The recent US 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,” the report added.
Crypto investment inflows by regional metrics further support the positive outlook, with the US leading the charge, registering $406 million in inflows.
US Elections Could Drive Crypto Inflows Further
If CoinShares analysts’ assumptions hold, crypto investments could see even stronger inflows during the remaining two weeks of October. With the US elections approaching on November 5, the narrative around crypto as a political topic is expected to gain further momentum.
This growing interest could significantly benefit digital asset investment products, as crypto becomes a focal point in an increasingly expensive voter landscape. The political spotlight on crypto, coupled with market factors, positions digital assets for potential growth amidst heightened investor engagement leading into November.
As BeInCrypto reported, the majority of US voters lean toward political leaders who embrace crypto. This is because crypto has progressively become a nonpartisan issue in the US, with almost an even split between the Republican and Democratic parties.
Clear and supportive crypto policies will be a powerful tool for either candidate, Donald Trump or Kamala Harris, to squeeze through a narrow path to victory. Polymarket data shows bettors favor Trump, who holds a nearly 10% margin against Kamala Harris.
Read more: How Can Blockchain Be Used for Voting in 2024?
With Bitcoin benefiting from the sentiment shift, BeInCrypto data shows BTC is up by almost 5% since Monday’s session opening, trading for $65,324 as of this writing.
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