Bitcoin continues to dominate digital asset funds with fourth consecutive week of inflows.
Bitcoin-backed funds from the U.S. dominated the market last week, attracting the majority of the $598 million in digital asset investment product inflows. Crypto-based investment vehicles have been experiencing consistent inflows for four consecutive weeks, accumulating over $5.7 billion in total for the year. This brings the assets under management (AUM) for 2024 to approximately 55% of the AUM achieved in 2021, which was a year of record-breaking inflows and the peak of the previous crypto bull cycle.
According to a report by CoinShares, the U.S. remained the leader in terms of regional inflows, primarily driven by the high demand for Bitcoin exchange-traded funds (ETFs). However, overall numbers were affected by outflows from Grayscale. While digital asset funds received $610 million in inflows, Grayscale’s GBTC experienced outflows of $436 million.
Brazil, Switzerland, and Australia followed the U.S. in terms of inflows, contributing to the non-American influx into these digital asset products. Altcoin fund inflows were led by Ethereum, which received $17 million. On the other hand, investors showed skepticism towards blockchain equities, withdrawing $81 million.
CoinShares emphasized the impact of the introduction of spot Bitcoin ETFs, which have consistently attracted inflows since their debut on January 11. BlackRock and Fidelity, the two leading issuers in this market, have outperformed their competitors, including Grayscale. Although they have not yet reached Grayscale’s AUM, BlackRock and Fidelity have collectively accumulated over $10 billion in less than three months. Their ETFs were among the fastest to reach $1 billion in AUM after launch, indicating strong interest from Wall Street investors.
Industry analysts and experts believe that this increasing demand could drive Bitcoin to reach new price highs. Fundstrat co-founder Thomas J. Lee predicts that BTC could reach $150,000 by December this year, while Matrixport expects a $63,000 Bitcoin by March. These price levels would bring BTC less than 10% away from its previous all-time high.
Overall, the continuous inflows into Bitcoin-backed funds and the growing interest from institutional investors suggest a positive outlook for the cryptocurrency market, with the potential for significant price gains in the near future.
