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With seven weeks still left in the year, there's already been more institutional money invested in digital assets in 2021 than in all of 2020, according to a new report from CoinShares. Bitcoin accounts for two-thirds of the year-to-date inflows, an all-time high of $6.4 billion.
As of Friday, the running tally of digital asset inflows among crypto asset managers reached $8.9 billion following 12 straight weeks of growth. That's already $2.2 billion more than the total invested in 2020.
The uptick in institutional crypto investing has been a long time coming, James Butterfill, CoinShares investment strategist and author of the report, told Decrypt.
“We started seeing evidence of outflows in February this year, that was an early indicator all was not right,” he said. “Then we started to see some price weakness in March and, of course, in May it fell substantially. We continued to see outflows all the way through early August.”
Butterfill credits the SEC approval of the Bitcoin futures ETF last month with signaling to institutional investors that it was time to get back in the pool. In fact, regulation topped the list of reasons CoinShares clients didn’t want to invest in Bitcoin.
“This is a young asset class that has only been around for 12 years,” he said. “For that reason, regulators have taken a longer time to make decisions. A lot of criticism gets leveled at its volatility, but some clients like Bitcoin for its volatility.”
Bitcoin accounts for two thirds and Ethereum for one fourth of the inflows in yesterday’s CoinShares report. A handful of popular altcoins like Binance’s BNB, Litecoin, Solana, and Polkadot make up the rest.
Source: CoinShares
Polkadot, the proof-of-stake interoperability protocol that allows data and tokens to flow between different blockchains, has seen its market cap surge in the last couple weeks. Its DOT coin saw inflows of $9.6 million last week, its best on record, according to the CoinShares report.
Sitting today at a $56 billion market cap, DOT has surpassed Dogecoin’s $37.1 billion and USDC’s $34.5 billion, according to CoinGecko, making it the 8th largest coin today.
The report also tracks inflows to individual asset managers.
After seeing record-high trading volumes at the start of the year, CoinShares XB—a line of exchange traded Bitcoin products available in Europe–has seen its inflows drop this year. Even so, its $5.5 billion AUM means that it’s second only to Grayscale, which CoinShares estimates has $55.7 billion AUM.
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