Cryptocurrency inflows from asset managers such as CoinShares, Grayscale, ProShares and 21Shares reached $2.2 billion last year, with Bitcoin investment products accounting for the majority, according to CoinShares’ 2023 report.
The full-year total represents a significant reversal compared to 2022. Inflows in 2023 were 2.7x, making it the third-largest year based on data since 2017, said James Butterfill, head of research at CoinShares. However, flows are still significantly lower compared to $10.7 billion in 2021 and $6.6 billion in 2020.
“Much of the recovery came in the final quarter, when it became increasingly clear that the SEC was preparing to launch a Bitcoin spot-based ETF in the U.S.,” Butterfill wrote.
Bitcoin funds were actually the main backers, securing $1.9 billion of the annual inflows. This represents approximately 87% of the total and is the highest percentage to date. The previous highest was 80% in 2020, and the lowest was 42% in 2017.
Butterfill added, “There appears to be no discernible trend here, with the most likely culprit being the hype around SEC ETF approvals.”
Solana funds gain while Ethereum products lag.
Total assets managed by the fund increased 129% year over year, reaching $51 billion, the highest level since March 2022. Blockchain stocks also saw inflows of $458 million, a 3.6x increase from 2022 and a 109x increase in AUM. % in 2023.
Ethereum investment products recovered inflows by the end of 2023, reaching $78 million. However, this represents only 0.7% of total AUM. In contrast, Solana products have benefited from investor resistance to ether-based funds, recording inflows of $167 million in 2023, or about 20% of total AUM, according to Butterfill.
Regionally, the United States witnessed the largest inflow in dollar terms, with $792 million. Germany followed with $663 million in inflows, followed by Canada in third place with $543 million. However, looking at the flows as a percentage of AUM in each country paints a different picture. According to this metric, US inflows increased by only 2% of AUM, while Germany’s inflows increased by 22% of AUM and Canada’s by 15%.
“The U.S. lagging is perhaps understandable given that investors are likely to prefer cash-based ETFs,” Butterfill said.
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