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Investor Shift To Bitcoin, $230M Inflows In 2023: CoinShares Report

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Digital asset investment has seen a major change in investor sentiment, including Bitcoin, as reported by CoinShares. With year-to-date inflows now at $230m and the 4th consecutive week of inflows totaling $76m, it is clear that 2023 is shaping up to be a promising year for the cryptocurrency market.

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Source: CoinShares

As reported by Tronweekly, previously CoinShares reported that digital asset investment products experienced the largest inflows since July 2022, with $117 million entering the market. As a result, the total AuM has increased by 43% from November 2022 lows, reaching $28 billion. 

Most of these inflows, amounting to $116 million, were invested in BTC, with minor amounts going towards short-bitcoin at US$4.4 million. However, multi-asset investment products have seen outflows for nine consecutive weeks, totaling $6.4 million, indicating a preference for selective investments.

Bitcoin Dominates Investment Flows

BTC continues to be the primary focus of investors, accounting for a staggering 90% of the total inflows last week, with a total of US$69m. It highlights the growing confidence in the world’s largest cryptocurrency and its potential for long-term growth.

While other cryptocurrencies saw minor inflows, Ethereum saw only US$0.7m of inflows despite the improving clarity around unstaking. The minor inflows were into Solana ($0.5m), Cardano ($0.6m), and Polygon ($0.3m). However, Polygon also saw outflows of US$0.5m. It further emphasizes the dominance of BTC in the digital asset market.

Short-Bitcoin Gains Momentum

Despite the dominance of long-Bitcoin inflows, short-Bitcoin has been making gains with inflows totaling US$8.2m over the same period. While the short-Bitcoin inflows remain relatively small in comparison, the last three weeks inflows total US$38m, representing 26% of the total AuM. 

Although the trade so far hasn’t worked well year to date, with total short-Bitcoin AuM having fallen by 9.2%, the inflows are still meaningful from a relative scaling perspective.

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Source: CoinShares

Regionally, the majority of inflows were focused on the US, Canada, and Germany, with inflows of $38m, $25m, and $24m, respectively. Total investment assets under management have risen 39% year-to-date, reaching a high of $30.3bn, the highest it’s been since mid-August 2022.

Related Reading | XRP’s Value Might Touch Million In 7 Years, Expert Predicts

XRP, ADA, DOT See A Surge In Inflows: Report

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XRP along with Cardano [ADA], Polkadot [DOT], and Avalanche [AVAX] witnessed an increase in activity during the last week as total inflows hit $37 million.

A recent report published by CoinShares revealed that altcoins such as XRP, DOT, ADA, and AVAX experienced inflows totaling $0.6 million, $1.0 million, $0.6 million, and $0.5 million, respectively.

Furthermore, a startling 68% of investors’ money was allocated to short investment products. All of them, according to the research, were indications of bearish market sentiment.

World’s dominant crypto asset, Bitcoin’s inflows hit $5.7 million last week, while short-bitcoin investment products saw inflows totaling $25.5 million, the largest weekly inflow since July 2022 $51 million.

Geographically, Inflows were found to be concentrated mostly in Europe, i.e Germany and Switzerland accounting for $14 million and $10 million respectively.

On the other hand, Hong Kong saw outflows from long investment products, while 95% of the inflows into the US were into short-Bitcoin products.

In terms of the coin, XRP’s price rallied by nearly 6%, ending the day at $0.42. The 6th ranked token tapped $0.43 for the first time since November 8.

The price surge was crucial as the beginning of the week went without much noise i.e no updates from the SEC and Ripple lawsuit for investors to consider.

The case now rests in the hands of Judge Torres, with market participants and Ripple CEO Brand Garlinghouse expecting a ruling by the summer.

On the other hand, Amicus Curiae attorneys John Deaton and Garlinghouse recently spoke optimistically about the case, supporting the current XRP move toward $0.50.

XRP Community Stands To Gain From This

If the SEC’s request to redact information from papers linked to the William Hinman speech is denied, it could be the end of the SEC. For the defendants and the XRP community, this is great news.

Garlinghouse’s statements regarding the nature of the records and the SEC’s attempts to keep the speech-related materials secret from the public signal that the agency might settle before a jury trial.

Speaking from Davos, Ripple CEO Brad Garlinghouse stated this about the Hinman speech-related documents,

“When those come to light, I think you will see more kind of like, how is it possible for the SEC to decide to bring a case against Ripple given what they were saying within their own walls.”

Solana (SOL) Products See 13-Fold Increase In Investments In One Week

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CoinShares recently reported a significant increase in funds flowing into investment products related to Solana (SOL). These products attracted a staggering $1.3 million in the past week alone, a thirteen-fold increase from the previous month.

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Source: CoinShares

This spike in interest suggests that investors are once again showing confidence in the Solana project, despite recent doubts about its future in the cryptocurrency market.

It’s worth noting that this surge in inflows came in a week where the price of SOL rose 55% in a week, and Since December 30, the price of SOL has experienced a remarkable recovery, as reported by TronWeekly yesterday.

It began the new year by soaring from $8.3 to $24 on January 15, an impressive increase of 195% in two weeks. However, the data from Coinmarketcap shows that SOL is now trading at $23.55.

SOL 7D graph coinmarketcap
Source: CoinMarketcap

Additionally, the CoinShares Report also reveals that digital asset investment products saw minor inflows of $9.2 million last week. In comparison, trading volumes remained low at $866 million, indicating that the recent rally in digital assets was not investment product-driven. 

This led to a weekly gain of over 13% in assets under management, the largest since October 2021. Bitcoin had the most significant inflow of any asset at $10 million, but short-bitcoin investment products saw outflows of $1.5 million. 

Whereas Ethereum broke its 8-week streak of outflows with an inflow of $5.6 million, likely due to the overall improvement in sentiment. Multi-asset investment products continued to see outflows of $3.2 million, its 7th week of outflows totaling $16 million, suggesting investors are becoming more selective in their investments. 

Among Solana other altcoins, Polkadot saw inflows of $0.4 million, and XRP saw outflows of $3.3 million, reversing gains from the previous week. Blockchain equities also saw positive sentiment, with inflows of $3.8 million.

Transaction Priority Fees for Solana Network Users

Solflare, the revolutionary wallet on the Solana network, has made a game-changing move by introducing transaction priority fees for its users.

This allows them to prioritize their transactions by paying higher gas fees, even during times of network congestion. This move makes Solflare the first wallet to implement this feature in a user-friendly way.

Vidor Gencel, the co-founder of Solrise Finance, took to Twitter to shed light on the importance of this new feature. He stated:

In-wallet transactions will automatically be prioritized with the current market price for fees, ensuring that your transactions are included faster than those in other wallets.”

This is a vital feature for crypto users, as other wallets may leave their users stranded during peak network activity due to a lack of proper prioritization. Solflare, however, ensures smooth and seamless transactions by adapting to the network conditions in real time.

Furthermore, this new feature not only benefits the users of Solflare but also contributes to the overall stability of the Solana network by preventing users from overwhelming the network with repeat transactions.

The introduction of transaction priority fees by Solflare is a revolutionary step in the crypto wallet industry, and it sets a new standard for user convenience and network efficiency.

Cardano [ADA] Scores Entry On Japanese Crypto Exchange

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Cardano [ADA] has entered the Japanese wing of one of the world’s largest crypto exchanges, OKCoin. Announcing the listing of ADA, OKCoin would start spot trading of the token on Sept. 1, trading the cryptocurrency against Japan’s national currency, the yen.

The growing adoption of ADA demonstrates the prowess of the eight largest crypto projects by market capitalization and the latest addition seems a plausible step.

Besides ADA, other leading cryptocurrencies such as BTC, ETH, XRP, and a number of smaller cap coins ones have already been listed on the Japanese exchange. A total of 17 pairs are now currently available for crypto enthusiasts to trade on OKCoin Japan.

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Cardano [ADA] Scores Entry On Japanese Crypto Exchange 6

In another similar move, Cardano [ADA] went live on the US-based trading platform Kraken as a collateral cryptocurrency on its futures platform. With that, the native token of the layer 1 blockchain has now joined a list of prominent cryptocurrencies such as Chainlink [LINK], Polkadot [DOT], Decentraland [MANA], and others.

Moreover, the token has provided exposure to over 40 futures contracts now, TronWeekly reported.

Apart from its widespread adoption, the token too managed to retain positive flows last week despite the crypto market downturn.

Cardano Ended Week With Positive Fund Flows

According to CoinShares’ latest weekly fund flow report, few cryptocurrencies ended the week with positive flows. Out of that, ADA, despite a significant drop in quotes, managed to attract free funds from investors.

So, per the report, Cardano managed to finish the week with a positive fund flow value of $500,000.

At a time when market volumes remain extremely low, ADA and a few others in the bunch kept bringing funds in at 55% of the annual average and the second lowest for the entire year, according to CoinShares estimates.

Moreover, the community surrounding the blockchain appears to be the most optimistic. Even though Crypto Winter has acted as a spoiler on the ADA’s price in the past months, it has however failed to contain the community’s positivism. In fact, ADA’s weighted sentiments have tapped a 4-month peak.

As per recent data from Santiment, The Weighted Sentiment showed a value of 1.50 for ADA, the highest in four months. This outpouring of optimism comes after a period of intense bearish outlook between late July and early August.

Ethereum steals investor’s favor as Bitcoin outflows intensify

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While investors have remained cautious due to the tepid market conditions, they have turned toward Ethereum now. According to the latest ‘Digital Asset Fund Flows Weekly’ edition by CoinShares, the world’s largest altcoin, Ethereum witnessed its third 3rd consecutive week of inflows right ahead of its London upgrade next month. In fact, last week’s inflows went up to $11.7 million. This brings the year-to-date inflows near the coveted $1 billion mark.

This comes amidst the digital asset investment products experiencing a rather dull week with minimal net inflows totaling just $2.9 million last week. Inflows to Bitcoin have halted due to severe sell pressure and instead, the outflow has gained traction, a trend that was seen over the last two weeks. The total outflow figures have reached $10.4 million.

However, CoinShares revealed that the outflows are minimal relative to the massive figures observed in May and June this year. Interestingly, even as the market traded poorly the nature of inflows and outflows across different providers was found to be mixed. Hence, the platform stated that it believes the timing of the rollouts of some investment products in the recent weeks, which helped investors to accrue market access for the first time, has induced profit-taking rounds.

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Ethereum steals investor's favor as Bitcoin outflows intensify 8

Meanwhile, a similar pattern was seen in the rest of the cryptocurrency market as well. For tokens such as XRP, Polkadot [DOT], Cardano [[ADA], and Stellar [XLM] all had inflows that were less than $0.5 million each. The report also mentioned,

“Volumes in Bitcoin fell to just 38% of the year-todate average, totalling US$3.9bn per day last week. We do not believe this represents something ominous in the market as we saw similar seasonal dips in volumes during the summer months in recent years.”

Ethereum increasingly becoming popular among institutions

Almost $100 billion was wiped off the entire cryptocurrency market in 24 hours as it remained jittery. Despite many alternatives, Ethereum fortifies the infrastructure of a rapidly growing crypto decentralized finance [DeFi] ecosystem. Several applications are being built on top of this new finance system that pushed the entire blockchain marketplace to new heights.

Hence, high-profile financial institutions are not only building the infrastructure to invest in Bitcoin but have also started expanding their footprint across the Ethereum network with the hope that the demand for this digital asset will soar as the applications created on top of them develop.

Digital Asset Fund Inflows Hit $4.2B In Q1; reports CoinShares

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Q1 institutional inflow breaks all previous records: CoinShares.

Despite signs of weakening institutional demand, which triggered fierce market-wide, crypto-asset funds and investment products have reached a milestone after hitting a record of $4.2 billion inflows already in the first quarter of the year. This was revealed by the latest CoinShares weekly report.

There are 15 more days to go and with the sudden drop in Bitcoin and the cryptocurrency market, it is speculated that more capital could be essentially be poured in to buy the dip.

Coming back to the stats shared by CoinShares, digital asset investment products closed on Friday with $55.8 billion assets under management. This was accompanied by the weekend bullish when Bitcoin established a fresh ATH nearing $62K. This reflected the institutional demand that had earlier surged to levels never seen before.

Despite the fact that Bitcoin has been the clear winner amongst the investors, Ethereum has also gained its fair share of popularity among the institutional market participants. Inflows to Bitcoin was found to be at $3.3 billion, while that of Ethereum stood at $731 million. The world’s largest altcoin tuned in an inflow of $113 million last week which comprised almost 50% of total flows.

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Digital Asset Fund Inflows Hit $4.2B In Q1; reports CoinShares 11

Grayscale Lead, CoinShares Seals 2nd Spot

Out of the five digital asset investment providers, Grayscale Investment led the score with the total AUM of $43.72 billion, followed by CoinShares with $4.89 billion, 3iQ with 1.66 billion, ETC issuance with $1.21 billion, and 21Shares with $1.11 billion.

The recently launched Purpose Bitcoin fund, on the other hand, was found to be in the sixth position with $517 million in AUM according to CoinShares.

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Digital Asset Fund Inflows Hit $4.2B In Q1; reports CoinShares 12

The inflows of the first quarter of 2021 surpassed the previous record of $3.9 billion that was seen in the fourth quarter of 2020.

CoinShares’ analysis also revealed that market participants continued to opt for investment providers that simply track the price of cryptocurrency assets over those that have active management strategies. These are known as passive funds. This sector has amassed an AUM of a whopping $54.1 billion, as opposed to $786 million for those with active strategies.