Crypto funds are receiving record inflows from investors

Crypto funds are receiving record inflows from investors

By Hassan Maishera - min read
Bitcoin and the U.S dollar. Source: Shutterstock

Institutional investors are pumping money into the cryptocurrency space in record numbers as they look to leverage the recent price surge of Bitcoin and others

Institutional investments in the cryptocurrency market have been rising in recent weeks. For the week ended 7 December, institutional investors added $429 million into cryptocurrency funds and products. This massive influx of cash is the second-highest weekly investment record into cryptocurrency funds and products as cryptocurrency assets under management reached a record $15 billion. The previous weekly high was three weeks ago when crypto funds received $468 million from investors.

Reuters, citing data from digital asset manager CoinShares, reported that cryptocurrency funds had recorded a stellar 2020 so far. By the end of 2019, crypto assets under management were just $2.57 billion, but the industry has added $12.5 billion over the past 12 months as Bitcoin and other cryptocurrencies rally.

Grayscale remains the largest cryptocurrency fund in the world. Last week, the company had $336.3 million in inflows. The investment saw Grayscale’s assets under management rise to a new high of $12.4 billion. CoinShares added that Grayscale had added nearly $4.3 billion in cryptocurrency assets under management this year.

James Butterfill, an investment strategist at CoinShares, told Reuters that there had been a shift in the sector as more institutional investors have gone from asking about Bitcoin to believing that the cryptocurrency is here to stay. He added that the current level of interest in Bitcoin shows that we are at the beginning of institutional adoption as the market is expected to grow further over the coming years.

Institutional investors prefer Bitcoin

Institutional investors have chosen Bitcoin and associated investment products over the other digital assets available recently. Bitcoin took the lion’s share of the total assets under management, with investors putting $334.7 million of the total $429 million into Bitcoin and its related assets.

As usual, Ether (ETH) came in second in terms of institutional investments last week. The cryptocurrency and its related products raked in roughly $87.1 million. The investments were likely from investors seeking exposure ahead of the Ethereum’s network launch of ETH 2.0 and its continued preference for decentralised finance platforms

Bitcoin attained a new all-time high last week after it traded at $19,900 on numerous cryptocurrency exchanges. Some experts believe the influx of institutional funds is helping the cryptocurrency market reach new record highs. It would be interesting to track how much money institutional investors are pouring into the market weekly.