Crypto Institutional Investors Are Frontrunning Retail As Inflows Reach Record Highs

Crypto investment products continue to shine in the middle of a strong bullish market sentiment. New data has shown institutional investors and traders are now going full speed on crypto investment products, allowing inflows to attain a new inflow record. According to CoinShares, a digital asset investment firm, digital investment products registered a record weekly inflow of $2.7 billion last week, pushing the year-to-date inflow near a new record.

The crypto market has attracted its fair share of rich visionaries and institutional traders over the years, with most just dabbling in and out. Recent market factors, however, have opened the industry and made it palatable to big traders. As a result, trading volume from this cohort of investors has ballooned to new highs.

In its latest weekly report, CoinShares noted that investment products based on cryptocurrencies reached a new milestone of $2.7 billion inflow last week, bringing the run to six consecutive weeks of inflows. Hence, the total inflow year-to-date is now at $10.3 billion, just $300 million shy of the $10.6 billion inflows recorded in 2021.

To put this into perspective, we’re less than three months into 2024, and inflows are already on par with those recorded throughout the bullish cycle in 2021.  At the same time, trading volume reached a new record of $43 billion for the week, smashing the $30 billion record set in the previous week.

Unsurprisingly, most of this activity can be credited to Bitcoin, with the majority of inflow going into the cryptocurrency. According to CoinShares, Bitcoin remained the focus of investors to attract $2.6 billion in inflows last week, representing 96% of the total inflow. This comes despite a $1.65 billion outflow from Grayscale’s Spot Bitcoin ETF.

Speaking of Spot Bitcoin ETFs, there’s no denying the fact that these investment vehicles have been the primary catalyst for Bitcoin’s recent growth. This has allowed Bitcoin to break over various price resistance to reach new all-time highs. Last week, the 10 ETFs in the US ended the week at a net inflow of $2.238 billion, with BlackRock and Fidelity leading the charge. Despite recent price rises, short Bitcoin products also recorded $11 million in inflows last week.

On the other hand, Ethereum investment products witnessed an outflow of $2.1 million last week to reverse $84.7 million inflows recorded in the prior week. This is despite Ethereum crossing over the $4,000 price level for the first time in two years. The reverse case is for Solana, which witnessed $24 million inflows after an outflow of $11.9 million in the previous week. 

Polkadot, Fantom, Chainlink, and Uniswap also saw inflows of $2.7 million, $2 million, $2 million, and $1.6 million, respectively.