Crypto Funds Flourish In 2023: CoinShares Reports $2.2 Billion Inflow
January 04 2024 - 3:30PM
NEWSBTC
CoinShares, a leading crypto asset investment firm, reported a
substantial $2.2 billion inflows into digital asset investment
products in 2023. This figure represents a notable 2.7-fold
increase from the inflows seen in 2022, marking it as the
third-largest year for such investments since 2017. According to
James Butterfill, Head of Research at CoinShares, this increase
signals a significant shift in investor sentiment and market
dynamics compared to the previous year. Related Reading: Crypto
Futures Razed To Ground As $659 Million Rekt With Bitcoin Crash
Despite this uptick, the inflows remained under the record highs of
$10.7 billion in 2021 and $6.6 billion in 2020. Butterfill
attributes much of the recovery to the final quarter of the year,
noting: [This was] where it became increasingly clear that the SEC
was warming up to the launch of bitcoin spot-based ETFs in the
United States. Diverse Investment Trends Across Crypto Funds
Bitcoin investment products were the primary beneficiaries,
accounting for $1.9 billion or 87% of yearly inflows. This
dominance of Bitcoin-related inflows marks the largest percentage
allocation to date, surpassing the previous peak of 80% in 2020 and
significantly higher than the 42% seen 5 years ago in 2017.
Butterfill noted no clear trend in this allocation, suggesting that
the hype surrounding US SEC-approved spot ETF might be a
contributing factor. In contrast, Ethereum investment products saw
a modest recovery in inflows towards the year’s end, totaling $78
million. However, this represented only 0.7% of Coinshares’ total
Assets Under Management (AUM). On the other hand, Solana investment
products recorded inflows of $167 million or 20% of the firm’s
total AUM in 2023. The US led the pack in terms of inflows in
dollar terms, with $792 million, followed by Germany with $663
million and Canada with $543 million. However, when analyzing
inflows as a percentage of AUM, the US saw a modest 2% increase,
while Germany and Canada witnessed a more significant growth of 22%
and 15% of AUM, respectively. This disparity suggests a regional
variation in investor preferences and strategies, particularly in
the US, where the anticipation of a spot-based ETF may have
influenced investment choices, according to Butterfill. In total,
assets under management at these funds surged by 129% over the
year, hitting a high of $51 billion, a value not seen since March
2022. Blockchain equities also saw a rise, with inflows increasing
3.6 times to $458 million in 2023, resulting in a 109% rise in AUM.
Recent Market Recovery Post-Matrixport’s Report The crypto market,
however, is not without its recent turmoil. The market faced a
setback following a bearish report by Matrixport, which speculated
on the rejection of spot Bitcoin ETFs by the US SEC.
Related Reading: From Bullish To Bearish, Bitcoin Plunges More Than
6% Amid Matrixport’s Contradictory Reports This report triggered a
brief market downturn, with Bitcoin and Ethereum experiencing
significant drops. Nonetheless, both cryptocurrencies show signs of
recovery, with Bitcoin regaining its $43,000 mark and Ethereum
climbing above $2,200. Featured image from Unsplash, Chart from
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