Crypto investment funds have seen their longest run of inflows since the 2021 bull market, signaling renewed institutional appetite for digital assets.
According to digital asset manager CoinShares, crypto funds brought in $261 million in net inflows last week, marking the sixth consecutive week of positive inflows. The $767 million in inflows over this period represents the strongest influx since the crypto market peak in late 2021.
Keypoints
- Crypto funds saw $767 million of inflows over the past 6 weeks, the largest since the 2021 bull market.
- Bitcoin funds attracted most of the inflows, totaling $842 million so far this year. This is likely driven by growing speculation of a spot bitcoin ETF approval.
- Ether funds saw their biggest weekly inflow of $17.5 million since August 2022, signaling renewed interest in ETH.
- Solana, Chainlink, Polygon, and Cardano also saw notable inflows as investors diversify into altcoins.
- The data signals rising institutional demand for crypto assets after the 2022 bear market and FTX fallout.
- The US drove most of the latest inflows, followed by Germany, Switzerland, and Canada as interest rises globally.
- Sustained inflows suggest higher confidence in the crypto market, with investors anticipating more bullish conditions ahead.
Bitcoin funds have attracted the lion’s share of new investment, pulling in $229 million last week and $842 million so far this year. Market watchers say speculation around a spot bitcoin ETF approval in the US is likely fueling interest from institutional players.
“This run of inflows now matches the July 2023 run of inflows and is the largest since the end of the bull market in December 2021,” said James Butterfill, CoinShares head of research.
Positive sentiment in digital assets continues, with 6th week of inflows totalling US$261mhttps://t.co/i91fgt1nxT
— James Butterfill (@jbutterfill) November 6, 2023
Ether funds also saw a spike in demand, registering $17.5 million in inflows last week – the highest amount since August 2022. This suggests warming investor sentiment toward the second largest cryptocurrency after a difficult start to the year.
Beyond bitcoin and ether, other crypto assets like Solana, Chainlink, Polygon, and Cardano also benefited from the broader uptick in momentum.
By geography, US investors continue to drive the majority of flows, accounting for $157 million of the latest weekly inflows. Notable amounts also came from Germany, Switzerland, Canada and other regions.
The prolonged run of inflows points to renewed institutional appetite after the crypto winter of 2022. Key crypto infrastructure failures like FTX’s collapse had sapped market confidence last year. But improving macro conditions and building optimism around crypto adoption seem to be enticing investors back in.
While risks and volatility remain high, the latest injection of institutional capital shows established players see long-term potential in the crypto asset class. With major barriers like regulatory uncertainty and market structure issues still to tackle, the road to mainstream crypto integration will likely be bumpy. But the flows suggest institutions plan to take the ride.
