Digital Asset Management Funds Reach Record High
Digital asset management funds in the US have seen a surge in total inflows, reaching $7.7 billion, according to a report by CoinShares. Bitcoin has been the most popular cryptocurrency among investors, with inflows totaling $703 million in the past week alone. This accounted for 99% of all inflows during that period. The report also highlights significant outflows, amounting to $6 billion, leaving $1.6 billion in total year-to-date inflows locked. The total global assets under management (AUM) for these funds currently stand at an impressive $53 billion.
Bitcoin Inflows Dominate Crypto-backed Investment Products
Bitcoin’s popularity as an investment choice is evident in the dominance of its inflows in crypto-backed investment products. In the past week, Bitcoin recorded a combined total of $703 million in inflows, making up 99% of all total inflows during that period. This influx of funds also indicates a reversal of Bitcoin’s negative price momentum. Short-Bitcoin fund movements saw outflows worth $5.3 million. Since the launch of spot Bitcoin ETFs on January 11, total inflows have reached $7.7 billion.
Record Inflows and Outflows for Exchange-Traded Products (ETPs)
Last week, inflows for exchange-traded products (ETPs) reached $708 million, while trading volumes fell to $8.2 billion. Although this is lower than the previous week’s trading volume of $10.6 billion, it still surpasses the average weekly trading volume of $1.5 billion recorded in 2023.
Sizable Outflows on Grayscale Bitcoin Trust ETF (GBTC)
Grayscale Bitcoin Trust ETF (GBTC) experienced significant outflows amounting to $926.7 million in the past week. Other outflows in the US include ProShares ETFs with $108.9 million, Sweden’s XBT Provider AB with $8.2 million, Germany’s ETC Issuance GmbH with $8.6 million, and Purpose Investments Inc ETF with $36.5 million in digital funds moved from their platforms.
Altcoins Attract Investors
While Bitcoin remains the most popular digital asset, altcoins have also caught the attention of investors. Solana attracted $13 million in inflows, followed by Ethereum with $6.4 million and Avalanche with $1.3 million. Blockchain-backed equities saw $11 million in inflows but lost $147 million in outflows.
Affordable Charges Drive Digital Fund Movements
The affordable charges offered by spot Bitcoin ETFs in the US have been a significant factor driving digital fund movements. Traditional crypto fund managers charge as much as 1.5% in management fees, while new-generation services charge between 0.2% and 0.5%. This fee difference has contributed to the movement of funds to the US in recent weeks.
Hot Take: Inflows of US Digital Asset ETFs Reach $7.7B in Four Weeks
Digital asset management funds in the US have experienced a surge in inflows, reaching a total of $7.7 billion within just four weeks. Bitcoin remains the top choice for investors, accounting for 99% of all inflows during this period. The popularity of altcoins such as Solana and Ethereum is also on the rise among investors. The affordability of charges offered by spot Bitcoin ETFs compared to traditional crypto fund managers has driven the movement of funds to the US. With a total of $53 billion in assets under management, the digital asset management industry shows no signs of slowing down.
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