Bitcoin Investment Fund Inflows Hit New Highs: CoinShares

Bitcoin and other cryptocurrency funds just had a record-setting week, according to data from asset management firm Coinshares.

In a weekly report, Coinshares takes stock of its performance against other crypto investment firms (like Grayscale, 3iQ, and 21Shares) by looking at how much money customers are pouring into funds. This past week, inflows across all funds tracked by the report reached $1.3 billion—a new weekly high.

Grayscale remains the top dog in crypto investment products, with over $26 billion in assets under management (AUM). About $21.6 billion of that is in the Grayscale Bitcoin Trust (GBTC)—a kind of investment vehicle that provides exposure to Bitcoin for investors looking to avoid the hassle of trading and custody.

Coinshares chalked up last week’s inflows to the performance of Bitcoin over the past few months; 97% of the $1.3 billion was in Bitcoin-related investment products.

But the report also suggests that investment products and funds represent a small fraction of the total Bitcoin trading volume:

“Despite the record inflows, investment products have not tested the liquidity of the underlying Bitcoin, with investment products representing only 6.5% of total Bitcoin trading turnover. So far this year volumes in Bitcoin have been considerably higher, trading an average of $12.3 billion a day compared to $2.2 billion in 2020.”

Part of the reason more people are trading Bitcoin this year has to do with the price. After setting a new all-time high of over $41,000 earlier this month, it’s settled down to around $32,000—at this this time last year, one Bitcoin was worth around $8,000.