CoinShares Report Declares a Top-Three Year for Crypto Inflows

Amazingly, during 2023, investment products for digital assets saw a phenomenal influx of $2.25 billion, making it the third-best year since 2017. According to CoinShares’ most recent report, inflows into the asset class have increased significantly, with total inflows being 2.7 times greater than in 2022.

Most of this recovery occurred in the fourth quarter, as there were increasing signs that the Securities and Exchange Commission (SEC) of the United States was becoming receptive to the concept of offering Bitcoin Exchange-Traded Funds (ETFs) that could be purchased on the spot. Over the course of the year, total assets under management (AuM) saw an astounding 129% increase, peaking at $51 billion—the biggest amount since March 2022.

Bitcoin’s Unprecedented Dominance

With $1.9 billion in inflows, or a startling 87% of total flows, Bitcoin emerged as the top performer. According to CoinShares’ research, this is the most domination ever recorded in history, exceeding the previous high point reached in 2020 when Bitcoin accounted for 80% of the flows. Interestingly, this percentage dropped significantly to just 42% in 2017. According to the study, this spike is being driven by anticipation about the possible approval of a spot Bitcoin ETF.

Some investors, however, did not share this confidence, allocating $60 million to short bets in Bitcoin in anticipation of a possible drop in price.

Even while Ethereum saw a rise in inflows at the end of the year, hitting $78 million, it still makes up a small portion of the assets under management (AuM), at 0.7%.

Due to investor reluctance to invest in Ethereum, Solana has benefited greatly, drawing inflows of $167 million, or an amazing 20% of AuM. Around 24% and 20% of XRP and Cardano’s AuMs, respectively, were raised within the same time period through inflows of $18 million and $14 million.

Furthermore, Litecoin and Polkadot reported $3 million and $6 million in yearly inflows, which accounted for 2% and 16% of their respective AuMs.

The upsurge in 2023 highlights the durability and allure of these investment products as the landscape of digital assets keeps changing, paving the way for an exciting year ahead.