Total inflows into traditional investment funds backed by crypto have finally surpassed the $1 billion mark for the year, indicating a strong surge of interest from investors. The latest data from crypto research and investment firm CoinShares reveals that inflows of $293 million were recorded for the week, bringing the year-to-date inflows to an impressive $1.14 billion.
This significant increase in inflows can be attributed to the steadily rising prices of cryptocurrencies, particularly Bitcoin. Currently trading at $36,410, Bitcoin has experienced a substantial growth of around 120% from its value of $16,500 at the beginning of the year.
Bitcoin continues to be the digital asset of choice for investors, with $240 million flowing into Bitcoin-backed funds alone for the week. Year-to-date, Bitcoin funds have witnessed inflows of $1.08 billion, further solidifying its position as the leading cryptocurrency.
Interestingly, there has been a bullish sentiment among investors towards Bitcoin, as reflected by the outflows of 7 million from short-Bitcoin funds, which increase in value when Bitcoin’s price falls. This highlights the confidence and optimism surrounding the number one cryptocurrency.
In addition, CoinShares reports that trading volume on trusted exchanges now comprises close to 20% of the total trading volume, a significant increase compared to 2020/21. This suggests that investors in exchange-traded products (ETPs) are actively participating in the current crypto rally.
Strong Inflows in Ethereum (ETH) and Solana (SOL)
While Bitcoin remains dominant, funds backed by Ethereum’s native token Ether (ETH) also experienced strong inflows last week, amounting to $49 million. CoinShares highlights this as a positive change in sentiment surrounding ETH, potentially influenced by the anticipation of approval for spot ETH exchange-traded funds (ETFs) in the US.
In line with this optimistic outlook, market participants are anticipating the approval of a spot BTC ETF by January 2024. Alongside Ethereum, altcoin funds backed by Solana’s SOL token stood out with inflows of $12.4 million, according to CoinShares’ data.
The surge in inflows into crypto investment funds showcases the growing recognition and acceptance of cryptocurrencies as an investment asset class. With Bitcoin leading the way and other altcoins gaining momentum, the crypto market continues to evolve and attract enthusiastic investors from various backgrounds.
