Crypto inflows have soared to nearly $2.2 billion over the past week, driven by the US election and the Federal Open Market Committee (FOMC) meeting.
This marks a sharp acceleration in investment, bringing year-to-date inflows to a record $33.5 billion. Meanwhile, total assets under management (AuM) hit an all-time high of $138 billion earlier in the week.
Crypto Investments Near $2.2 Billion
Coinshares’ latest report attributes the surge in inflows to a confluence of factors, including the Federal Reserve’s looser monetary policy and a sweep of the Republican Party in the recent US elections. Both developments have bolstered investor confidence in the digital asset market.
Looser monetary policy and the complete sweep of the Republican Party in the recent US elections, writes James Butterfill of Coinshares.
Bitcoin accounted for $1.48 billion of inflows last week, highlighting its dominance in the digital asset space. However, its recent price surge to an all-time high triggered profit-taking, leading to outflows of $866 million. Additionally, products betting on Bitcoin’s decline also saw $49 million in inflows, reflecting hedging activity by cautious investors.
Crypto Inflows. Source: CoinShares
Ethereum, which had faced outflows in the previous weeks, has rebounded strongly with $646 million in inflows. This resurgence is attributed to renewed investor optimism following Justin Drake’s Beam Chain upgrade proposal and broader pro-crypto sentiment boosted by the Republican victory.
Ethereum developer Justin Drake has proposed a ‘Beam Chain’ to replace the Beacon Chain, reducing the staking requirement from 32 ETH to just 1. The move aims to make staking more accessible. “Optimistic,” commented one user on X.
Political and economic background
The Republican Party’s sweep of the House and Senate has sent a clear signal to markets. With 274 pro-crypto candidates elected to the House and 20 to the Senate, the political landscape now looks increasingly favorable to crypto adoption. In contrast, only 122 anti-crypto lawmakers were elected to the House and 12 to the Senate, according to data from Stand With Crypto.
The election results come at a crucial time as the Fed’s recent rate cuts have added liquidity to markets. Analysts have noted that looser monetary policy often correlates with increased risk in investments, including cryptocurrencies.
Crypto election updates. Source: Stand With Crypto
Donald Trump's pro-crypto stance also continues to fuel market optimism. Many expect regulatory clarity to improve under the new administration.
“Beta with a Bitcoin twist is how I would describe the flows over the last week since the election, and really all year. While the market seems a bit exhausted, ETF investors are still quite bullish,” said Bloomberg expert Eric Balchunas.
While the record inflows and rising price of Bitcoin highlight growing confidence in the crypto market, the profit-taking trend seen later in the week highlights investor caution.
Analysts suggest that the market’s trajectory will depend on regulatory developments and the Federal Reserve’s monetary policy in the coming months. In the meantime, political support from newly elected pro-crypto lawmakers could provide the regulatory certainty needed to sustain this momentum.
The article Crypto investments reach US$2.2 billion and set a new record was first seen on BeInCrypto Brazil.
