Crypto investment funds attract $2 billion in 2023

abdelaziz Fathi

The year 2023 marked a notable surge in investments in digital asset exchange-traded products (ETPs), with inflows exceeding $2 billion.

FX Brokers and Crypto Payments

This substantial growth positions 2023 as the third-largest year for net inflows into digital asset ETPs since 2017, crypto investment firm CoinShares said in a new report. The total inflows of $2.2 billion for the year were a significant leap from the inflows of 2022, indicating growing investor confidence in cryptocurrency as an asset class.

A key driver behind this influx of investment was the increasing likelihood of the U.S. Securities and Exchange Commission (SEC) approving bitcoin spot-based ETFs in the United States. James Butterfill from CoinShares noted that most of the inflows occurred in the final quarter of the year as this anticipation grew. In the final week of 2023 alone, digital asset ETPs saw $243 million in net inflows.

Bitcoin ETPs dominated the inflow figures, attracting $1.9 billion, which accounted for 87% of the total inflows. This ratio was the highest ever recorded, surpassing the previous high of 80% in 2020. The price of Bitcoin reflected this positive sentiment, climbing around 155% to close the year above $42,000.

The growth wasn’t limited to Bitcoin. The total assets under management (AUM) in these funds escalated by 129% over the year, reaching $51 billion — the highest level since March 2022. Blockchain equities also saw a boost, with inflows of $458 million, which was 3.6 times higher than in 2022. This resulted in a 109% increase in AUM in 2023 for blockchain equities.

Ether investment products, while experiencing a recovery in inflows towards the end of the year with $78 million, represented only a small fraction (0.7%) of their total AUM. Conversely, Solana products saw significant inflows of $167 million, amounting to about 20% of their total AUM.

Breaking down the latest statistics, Coinshares said the aggregate data masks a significant regional polarization of views. In particular, the United States led in terms of the absolute value of inflows, with $792 million, followed by Germany with $663 million and Canada with $543 million. However, when looking at inflows as a percentage of AUM, Germany led with 22%, Canada followed with 15%, and the U.S. saw a growth of 2%.

  • Read this next

    Retail FX

    Weekly Roundup: FX prop firms switch to cTrader, who moved $1.35B BTC?

    The foreign exchange and cryptocurrency markets are always active, and this past week was no exception. Stay ahead with a selection of essential stories and updates that matter most to market participants.

    Digital Assets

    Bitcoin breaks all records with a massive $1.347 billion transaction

    This transaction has surpassed previous records, setting a new benchmark for Bitcoin trades. Before this event, the largest Bitcoin transactions included a $1.1 billion trade in April 2020 involving 161,500 BTC, and other significant transactions ranging from $491 million to $1.033 billion throughout 2019 and 2020.

    Digital Assets

    Uniswap debuts Ethereum ‘uni.eth’ subdomains

    Decentralized exchange platform Uniswap has integrated Ethereum Name Service (ENS), allowing users to create human-readable domain names and cryptocurrency wallet addresses using .eth endings.

    Web3

    Magic Square Expands with TruePNL Acquisition

    Binance’s web3 app store, Magic Square, acquired token platform TruePNL in a cash deal this week for an undisclosed sum. The deal brings TruePNL’s infrastructure (excluding branding & token) under Magic Square’s wing. Initially seeking a partnership, Magic Square opted for a full acquisition.

    Crypto Insider

    The Future of Prediction Markets? Zeitgeist Launches Decentralized Court System

    Polkadot-powered prediction market protocol Zeitgeist has announced the launch of its latest innovation: a decentralized court system.

    Digital Assets

    Crypto exchange Kraken fires back at SEC lawsuit, claiming overreach

    Crypto exchange Kraken is pushing back against the U.S. Securities and Exchange Commission (SEC), seeking to toss out a lawsuit that accused the platform of operating without proper registration.

    Industry News

    Exness Named a Best Place to Work in 2024

     Global leader Exness, tops in retail trading volume, earns 2024 “Best Place to Work” award, cementing its employee-centric culture after three prior years of winning the Cyprus national title.

    Digital Assets

    Swan Bitcoin taps Bakkt for crypto offering in the US

    “We are thrilled to be taking this exciting step forward in our partnership with Swan. This is just the beginning of our collaboration, as we intend to explore further growth opportunities together in the future, including expansion into international markets.”

    Digital Assets

    Polkadot Awards Bifrost a 500,000 DOT Loan to Enhance Liquid Staking Adoption

    Bifrost, a leader in liquid staking solutions, has secured a 500,000 DOT loan from Polkadot’s treasury to expand the reach and utility of its vDOT product within the ecosystem.

    <