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Crypto fund inflows soar by 600% to top $5.6 billion this year

Total investor inflows into cryptocurrency funds and products have hit $5.6 billion so far this year – up more than 600% from 2019.

According to the latest data from asset manager CoinShares, the inflows plus the latest price moves lifted assets under management for the sector to nearly $19 billion in 2020. Assets under management ended 2019 at just $2.57 billion.

Interest in cryptocurrencies skyrocketed this year as investors saw bitcoin as a hedge against inflation and as an alternative to the depreciating dollar.

Bitcoin hit yet another all-time peak of $24,298.04 on Sunday but was last down nearly 3% at $22,832.78, hit by a wave of risk-off moves in financial markets on worries about the new coronavirus strain.

On Monday ethereum, the second largest cryptocurrency, fell 4.4% to $610.14.

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“It’s no secret that there are a few big players in the bitcoin/crypto space and that it is mostly crowded with retail-related traders and investors,” said Julius de Kempenaer, senior technical analyst at StockCharts, a technical analysis and financial charting platform for online retail investors.

“The current jump will certainly attract new retail money, but we are also already seeing adoption by more institutions. I think the question is whether institutions can afford not to participate, and for how long,” he added.

Inflows into investment crypto investment products totalled $335 million as of Friday, with bitcoin flows accounting for $792.1 million, the data showed. Ethereum had $207.3 million in weekly flows.

ETHEREUM INFLOWS

So far this year, investors pumped $15.6 billion into bitcoin products and funds, while ethereum inflows reached nearly $2.5 billion.

Grayscale, the world’s largest crypto fund, had $250.8 million inflows in the latest week, raising its assets under management to $15.3 billion. So far this year, Grayscale has amassed inflows of nearly $5 billion, the CoinShares report said.

Trading volumes for bitcoin hit a record $11 billion on trusted exchanges on December 17, but slowed over the weekend. Turnover, however, remained at above the average of $4 billion on Saturday and Sunday.

  • Reuters

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