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Crypto Asset Flows Bounced Back Last Week, Ending Record $4.5B Quarterly Haul

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Investment flows into cryptocurrency funds jumped fivefold last week to $106 million, rebounding from a five-month low, according to a new report from the digital-asset manager CoinShares.

The prior week had seen the fund flows dry up to about $21 million, the lowest since October, as sideways trading action in bitcoin (BTC) and other digital-asset markets failed to inspire buyers.

The latest week’s tally wrapped up a record quarter for crypto fund flows, at $4.5 billion, some 11% higher than in the final quarter of 2020, according to CoinShares.

That pace represented a slowdown from the prior quarter’s growth of 240%, potentially indicating waning interest or indecision among digital asset investors – or maybe just the difficulty of increasing off a bigger base. CoinShares cautioned against drawing conclusions.

  • “It is not indicative of a slowing trend, as quarterly growth rates tend to be highly varied,” wrote CoinShares.
  • Bitcoin products garnered the majority of last week's inflows, around $83 million, versus about $20 million for Ethereum (ETH) products.
  • “Assets under management (AUM) for both active and passive digital asset investment products are now at an all-time high of $59 billion.”
  • Active investment managers (strategies that adjust portfolio weightings based on market conditions rather than following an index) make up a decreasing amount of total AUM, to 1.5% of total AUM during the first quarter versus 3.6% in Q4 2020.
  • That shift might reflect increasing demand for "passive" investment vehicles like trusts and exchange-traded funds, which aren't yet approved for trading in the U.S. but have garnered substantial interest in other countries, including Canada.
Chart shows weekly crypto asset fund flows
Source: CoinShares
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 4/7/2021

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