New York: According to data from cryptocurrency manager Coinshares, the inflow of funds into cryptocurrency funds and products reached a record US$4.5 billion in the first quarter, indicating that institutions have increased their participation in the once troubled industry.
Capital inflows in the first quarter increased by 11% from the last three months of 2020 ($3.9 billion).
Investments into crypto, however, slowed in the first quarter compared with the fourth, where growth was 240%, data showed. Coinshares said in the report, however, that this was not “indicative of a broader slowing trend, as quarterly growth rates tend to be highly varied.”
On Monday, the cryptocurrency sector hit an all-time peak of $2 trillion in market capitalization. Bitcoin’s market cap was more than $1 trillion, holding that milestone level for one whole week.
“There’s so much momentum that’s building and people are scrambling to see where the other coins, aside from bitcoin, are going,” said Edward Moya, senior market analyst at online FX trading platform OANDA.
Bitcoin had the most inflows in the first quarter with $3.5 billion, according to the Coinshares data, followed by ethereum, which posted $765 million in investments.
The largest cryptocurrency in terms of market cap hit a record high of $61,781.83 in mid-March, but has since traded in a narrow range as investors consolidated gains.
CoinShares data shows that managed crypto assets also soared to a peak of $59 billion. Last year, the industry’s assets under management reached $37.6 billion.
Grayscale is still the largest digital currency management company with US$46.1 billion in assets, while CoinShares is the second and largest digital asset management company in Europe, with approximately US$5.1 billion in assets under management.
Of the $59 billion in assets under management, active investment managers represented just 1.5% of total assets under management, down from 3.6% at the start of the fourth quarter last year.
Total market volumes remained high during the quarter, averaging $11.6 billion per day, compared with $3.5 billion in the last three months of 2020.