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Quick Take
- Digital asset investment products recorded $2.2 billion of inflows last year, according to CoinShares.
- The inflows were 2.7 times greater than those seen in 2022 — the third-largest year on record.
Crypto fund inflows at asset managers such as CoinShares, Grayscale, ProShares and 21Shares reached $2.2 billion last year, dominated by bitcoin investment products, according to CoinShares’ 2023 report. The yearly total marks a significant turnaround compared to 2022 — with 2.7 times the amount of inflows in 2023 marking the third-largest year based on data going back to 2017, CoinShares Head of Research James Butterfill said. However, the flows were still substantially lower than the $10.7 billion witnessed in 2021 and $6.6 billion in 2020. “Much of the recovery was in the final quarter where it became increasingly clear that the SEC was warming up to the launch of bitcoin spot-based ETFs in the United States,” Butterfill wrote. Bitcoin funds were indeed the main benefactor, capturing $1.9 billion of the yearly inflows. This represents some 87% of the total — the largest percentage to date. The prior peak was 80% in 2020, with the lowest being 42% in 2017. “There does not seem to be a discernible trend here, with the most likely cause being hype around an SEC ETF approval,” Butterfill added. Total assets under management at the funds grew by 129% over the year to reach $51 billion — the highest level since March 2022. Blockchain equities also performed well, with inflows of $458 million — 3.6 times higher than in 2022 — seeing AUM rise by 109% in 2023. Ether investment products saw a recovery of inflows toward the end of 2023, reaching $78 million. However, this represents just 0.7% of their total AUM. In contrast, Solana benefitted from investor reluctance on Ether-based funds, according to Butterfill, registering inflows of $167 million in 2023 — some 20% of their total AUM. Regionally, the U.S. witnessed the largest inflows in dollar terms, bringing in $792 million. Germany followed with $663 million worth of inflows, and Canada third, registering $543 million. However, looking at the flows as a percentage of AUM in each country paints a different picture. By this metric, U.S. inflows only grew by 2% of AUM, compared to 22% of AUM for Germany and 15% for Canada. “The U.S. lagging is perhaps understandable given the likely preference amongst investors for a spot-based ETF,” Butterfill said. Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures. © 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.Ether products lag while Solana funds benefit
About Author
James Hunt is a reporter at The Block, based in the UK. As the writer behind The Daily newsletter, James also keeps you up to speed on the latest crypto news every weekday. Prior to joining The Block in 2022, James spent four years as a freelance writer in the industry, contributing to both publications and crypto project content. James’ coverage spans everything from Bitcoin and Ethereum to Layer 2 scaling solutions, avant-garde DeFi protocols, evolving DAO governance structures, trending NFTs and memecoins, regulatory landscapes, crypto company deals and the immersive metaverse. You can get in touch with James on Twitter or Telegram via @humanjets or email him at [email protected].
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