Cryptocurrency investment products saw a remarkable turnaround with $407 million in inflows between October 5–11, according to CoinShares' latest Digital Asset Fund Flows report. This surge comes after a previous sell-off of $127 million, marking a clear shift in investor sentiment.

James Butterfill, head of research at CoinShares, attributes this surge to political factors, notably the upcoming US elections. He notes that stronger-than-expected US economic data had little effect on curbing inflows, indicating that the political climate, especially polling favoring Republicans, is playing a pivotal role. Republicans are generally viewed as more supportive of digital assets, which likely contributed to the renewed investor interest.

Bitcoin emerged as the primary beneficiary, with $419 million in inflows, reinforcing its position as the top choice for investors amid political uncertainties. On the other hand, short-Bitcoin investment products saw outflows of $6.3 million, suggesting a more bullish sentiment overall.

Notably, blockchain equity ETFs also experienced significant growth, attracting $34 million during the week, making it one of the best-performing periods for ETFs in 2024. While multi-asset investment products saw minor inflows of $1.5 million, Ethereum continued its outflow streak, with $9.8 million pulled from Ether products.

This surge in crypto investment continues a trend that began in mid-September, with nearly $2 billion funneled into crypto products by the end of the month, signaling strong momentum for the sector heading into the US elections.