NEW YORK (Reuters) – Investment flows in cryptocurrency funds and products hit a record $ 1.31 billion last week after a few weeks of small outflows as investors saw the decline in prices for Bitcoin and other digital, according to the latest Monday data Assets used CoinShares by the asset manager.
FILE PHOTO: This January 21, 2021 illustration places representations of the Bitcoin virtual currency on a computer motherboard. REUTERS / Dado Ruvic / illustration
The industry’s total assets under management (AUM) decreased to $ 29.7 billion on Jan. 22, from a high of $ 34.4 billion on Jan. 8. At the end of 2019, the AUM was only $ 2 billion.
Grayscale, the world’s largest digital currency manager, had $ 24 billion in assets under management last week, up from $ 28.2 billion on Jan. 8. CoinShares, the second largest crypto fund, had assets under management of $ 2.9 billion last week, also down from $ 3.4 billion on Jan. 8.
“We believe that investors have been very price-conscious this year because of the speed with which Bitcoin prices were reaching new highs,” said James Butterfill, investment strategist at CoinShares.
“The recent price weakness, sparked by Treasury Secretary Janet Yellen’s recent comments and unfounded double-spending concerns, now appears to have been a buying opportunity as the inflows break the all-time weekly inflows,” he added.
Bitcoin fell to a low of $ 28,800 on Friday after hitting an all-time high of $ 42,000 on Jan. 8. It was last down 0.5% to $ 32,124.
About 97% of the inflows went to Bitcoin. The data showed that Ethereum, the second largest cryptocurrency, saw inflows of $ 34 million last week.
Bitcoin volume so far this year has been significantly higher, trading an average of $ 12.3 billion per day, compared to $ 2.2 billion in 2020.
Glassnode, which provides insights into blockchain data, said in a report on Monday that Bitcoin’s unrealized net profit / loss (NUPL) is nearly crossing the “belief” range and moving into the “euphoria” range.
Previously, when NUPL entered this area, it signaled a global spike in Bitcoin price.
Reporting by Gertrude Chavez-Dreyfuss; Adaptation by Richard Chang