Bitcoin (BTC) and other cryptocurrencies have been experiencing a surge in institutional investment, with over $1 billion in new inflows in less than two months. According to a recent weekly report from CoinShares, a crypto asset management firm, Bitcoin and altcoins are once again attracting significant capital.
One of the primary drivers of this trend is the excitement over the potential approval of the United States’ first spot exchange-traded fund (ETF) for cryptocurrencies. Since November 2022, the total crypto market cap has increased by $600 billion, indicating a growing interest in digital assets.
In the past two months, there has been a significant increase in funds being deployed to crypto investment products, with inflows totaling US$293m last week alone. This brings the 7-week run of inflows past the US$1 billion mark, with year-to-date inflows at US$1.14 billion, making it the third highest yearly inflows on record.
The assets under management (AUM) tally for crypto exchange-traded products (ETPs) has also seen a substantial increase, doubling since the start of the year and gaining nearly 10% in the past week alone. The total AUM is now at US$44.3 billion, the highest since the major crypto fund failures in May 2022.
According to CoinShares, investors aiming to long BTC have taken the lion’s share of the volume, with inflows totaling US$240m last week and year-to-date inflows reaching US$1.08 billion. This positive sentiment is also reflected in the outflows from short-bitcoin products, which saw US$7m being withdrawn.
As a result of this renewed interest in cryptocurrencies, on-chain analytics firm Glassnode has observed changes in Bitcoin supply dynamics. With the next block subsidy halving just five months away, BTC being stored for long-term purposes is now outpacing the amount being mined by 2.4 times. This indicates a strong belief in the future potential of Bitcoin among long-term holders.
Philip Swift, creator of the statistics platform Look Into Bitcoin, noted the increasing number of wallet entities, both large and small, as a sign of adoption of Bitcoin. He emphasized that this is a significant development for the cryptocurrency and reflects the growing interest in digital assets.
While the surge in institutional investment in cryptocurrencies is a positive sign for the industry, it is important to note that this article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.