Digital asset manager CoinShares has reported a significant surge in institutional investment in cryptocurrency products, with inflows reaching $2.2 billion last week.
This marks a 15% increase from the previous week’s figure of $1.98 billion, driven by a combination of political developments and market dynamics.
Record Year for Digital Assets
According to CoinShares’ report on 18 November, year-to-date inflows into digital assets now total $33.5 billion.
Assets under management (AUM) hit a new high of $138 billion, reflecting growing institutional confidence in the sector.
Bitcoin (BTC) led the pack, accounting for the majority of inflows at $1.48 billion, or 67% of the total. Ethereum (ETH) and Solana (SOL) followed, attracting $646 million and $23.9 million respectively.
Ethereum’s inflows were bolstered by excitement over Justin Drake’s Beam Chain network upgrade proposal, which significantly increased its weekly inflow from $157 million.
Not all assets fared equally well, with multi-asset products and Binance Coin (BNB) recording outflows during the same period.
BlackRock Leads the Surge
BlackRock’s iShares Bitcoin Trust ETF (IBIT) played a pivotal role in last week’s inflows, contributing $2.1 billion, a 63% share of the total. Other major funds, including Grayscale and Fidelity, experienced outflows ranging from $8 million to $153 million.
Political Factors Driving Inflows
James Butterfill, CoinShares’ head of research, attributed the surge in institutional interest to expectations of a looser monetary policy and the outcome of the recent U.S. elections.
The Republican majority in Congress, combined with former President Donald Trump’s campaign for a second term, has ignited optimism for crypto-friendly policies.
Trump’s pro-crypto stance has resonated with investors, particularly following his consideration of high-profile, crypto-supportive figures for key cabinet positions, including Elon Musk, Tom Emmer, and Robert F. Kennedy Jr.
Legislative Momentum Boosts Confidence
The proposed Bitcoin Act, championed by Republican Senator Cynthia Lummis, alongside discussions around a Bitcoin Strategic Reserve, has further enhanced investor confidence in the long-term potential of Bitcoin and the wider cryptocurrency market.
Butterfill noted that the favourable political and regulatory landscape could unlock significant opportunities for Bitcoin, solidifying its position as a key asset for institutional investors.
With digital asset inflows surging and a record-breaking year underway, the crypto market appears poised for continued growth amid a convergence of political and economic factors.
