Crypto investment products see $407m in inflows as investors shift focus from monetary policy

Global Crypto Investment Products See $407 Million in Inflows, Driven by U.S. Elections, Not Monetary Policy

Crypto investment products recorded a substantial $407 million in inflows, with analysts at CoinShares attributing the surge to political factors surrounding the upcoming U.S. elections rather than traditional monetary policy considerations.

Leading asset managers like BlackRock, Fidelity, and Grayscale were among the major beneficiaries of the inflows, signaling a shift in investor focus. James Butterfill, Head of Research at CoinShares, pointed out in a blog post on October 14 that the data reflects growing optimism around political developments, particularly as the vice presidential debate and polling trends favoring Republicans—who are often seen as more crypto-friendly—sparked renewed interest in digital assets.

Butterfill noted that, despite stronger-than-expected economic data, which typically influences market behavior, it had little impact on stemming outflows from other asset classes. This shift underscores a growing trend where investors are prioritizing political events over economic indicators.

Bitcoin Dominates Inflows

As expected, Bitcoin (BTC) was the primary beneficiary of these political shifts, attracting $419 million in inflows. In contrast, Ethereum (ETH) “resumed its trend of outflows,” with $9.8 million exiting the network last week.

Interestingly, short-Bitcoin investment products also experienced $6.3 million in outflows, highlighting a clear divergence in sentiment as investors shifted their focus away from traditional market reactions and towards political dynamics.

Geographic Breakdown and Investment Trends

The bulk of the inflows came from the U.S., which accounted for $406 million, with Canada contributing a smaller amount of $4.8 million. Meanwhile, multi-asset investment products saw continued inflows for the 17th consecutive week, though at a modest $1.5 million.

In addition, blockchain equity exchange-traded funds (ETFs) saw one of their largest weekly inflows of the year, receiving $34 million, likely spurred by the recent rise in Bitcoin prices.

Changing Investor Narrative

Overall, the data suggests that political events—especially the upcoming U.S. elections—are increasingly taking precedence over traditional market drivers such as economic data and monetary policy, marking a shift in investor sentiment toward political risk in the crypto space.