The cumulative weekly inflows in the cryptocurrency-related investment products rose to a record high of $1.31 billion in the past week after a minor outflow in the previous week. Institutions still prefer to go for bitcoin over the other digital assets, with the flagship crypto accounting for 97% of the total weekly inflows.
Based on a report published by CoinShares, which is the biggest crypto asset management firm in Europe, the average daily trading volume of BTC spiked significantly in 2021. So far this year, bitcoin has recorded an average trading volume of $12.3 billion daily, compared to about $2.2 billion in 2021.
In general, bitcoin accounts for a staggering 83% of the total digital assets under management (AUM). However, 97% weekly inflow into bitcoin indicates that investors have more confidence in bitcoin compared to other crypto assets. The report reads:
“Ethereum saw inflows of US $34m last week, although investors have been cautious, with little inflows since early December. Despite the record inflows, investment products have not tested the liquidity of the underlying Bitcoin, with investment products representing only 6.5% of total Bitcoin trading turnover.”
Bitcoin Price Action
CoinShares also mentioned that considerable volatility in bitcoin this year has pushed most investors to become more price-conscious. Bitcoin reached an all-time high of just under $42,000 earlier this month after enjoying a record-breaking price rally.
Bitcoin has lost almost 25% of its value after it recorded that all-time high, and it is currently hovering around $31,000. Furthermore, Ethereum registered an all-time high of $1,470 on January 25, posting almost 20% gains over the weekend. CoinShares explained in their report:
“We believe investors have been very price-conscious this year due to the speed at which prices in Bitcoin achieved new highs. The recent price weakness, prompted by recent comments from Secretary of the US Treasury, Janet Yellen, and the unfounded concerns of a double spend, now looks to have been a buying opportunity with inflows breaking all-time weekly inflows. So far this year, volumes in Bitcoin have been considerably higher, trading an average of US$12.3bn a day compared to US$2.2bn in 2021.”