Since the start of 2021, institutions are aggressively investing in the crypto markets. Notably, crypto investors accumulated a lot of Ether (ETH) in the lead up to the launch of the CME futures. ETH products represented 80% of the past week’s institutional crypto inflows.
CoinShares crypto asset manager has said that investment inflows into institutional crypto funds exploded last week, and most of it was Ethereum. The report said that of the $245 million crypto inflow in the past week, 80% of it which translates to $195 million was invested in various ETH products before the launch of the Chicago Mercantile Exchange Ethereum futures contracts on February 8.
In comparison, Bitcoin had $41.9 million of the weekly flows, with a year-to-date total of around $2.02 billion. This report suggested that investor diversification was starting to happen, adding that there was little evidence of taking profits with many investors preferring to buy and hold.
“We believe investors are looking to diversify and are growing increasingly comfortable with Ethereum fundamentals. Bitcoin had its lowest inflows (US$42m) since the all-time highs were achieved in the week ending 8th January 2021.”
Cumulative inflows into digital asset investment products for 2021 up to now has reached $2.6 billion, which equates to 39% of the $6.7 billion in institutional capital that was put into crypto funds last year in just six weeks.
The report said that investment product trading volumes remain quite high, averaging $670 million in a day last week, translating to 5.4% of the total BTC trading volumes.
Institutions Invest Large
Grayscale remains the biggest institutional crypto asset fund holding a total of $33.4 billion in assets under management (AUM) as of February 8.
02/08/21 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
— Grayscale (@Grayscale) February 8, 2021
Grayscale’s Ethereum Trust has been surging in terms of the total share of the AUM figure and has now reached more than $5 billion equating to more than 15%. However, the Bitcoin Trust still has the biggest share of all investments, with 82% of the total.
CoinShares reports that 21Shares is the second-biggest institutional fund by weekly inflows with about $21 million, with WisdomTree coming in third having $11.5 million
Most analysts and commentators anticipated that the launch of CME’s Ether futures would be followed by a steep crash to repeat the collapse in prices that came after the launch of BTC futures in December 2017.
Nonetheless, ETH rallied after contracts launched, posting a new all-time high of $1,780 on February 9. At the time of writing, ETH is still trading above $1,740.