The recent US election may have brought a temporary sense of relief and stability to the markets, but it seems that the honeymoon period is now over. According to James Butterfill, Investment Strategist at CoinShares, macroeconomic data is once again taking the lead in driving the performance of crypto Exchange Traded Products (ETPs).

Butterfill points out that during the post-election period, the focus was primarily on political developments and their potential impact on the markets. However, as the dust settles and the new administration takes office, investors are once again turning their attention to economic indicators and their influence on the crypto market.

This shift in focus is evident in the recent performance of crypto ETPs, which have seen a decline in inflows and a decrease in overall market value. Butterfill explains that this is due to the correlation between traditional markets and crypto assets, as economic data such as inflation and interest rates can have a significant impact on both.

Butterfill also notes that the recent surge in Bitcoin’s price was largely driven by institutional investors seeking a hedge against inflation and a store of value. However, as economic data suggests a potential rise in inflation, these investors may now be turning to traditional assets such as gold, causing a decrease in demand for crypto assets.

Despite this temporary setback, Butterfill remains optimistic about the long-term prospects of crypto ETPs. He believes that as the global economy continues to recover from the effects of the pandemic, investors will once again turn to crypto assets as a means of diversification and potential growth.

In conclusion, while the post-election period may have brought a brief respite for the crypto market, it seems that economic data is once again taking center stage. As the world continues to navigate through uncertain times, it will be interesting to see how the performance of crypto ETPs evolves and adapts to changing market conditions.