Cryptocurrencies post 36% jump in 2021 inflows led by Bitcoin, Ethereum

The cryptocurrency market cap jumped nearly 300 percent from $763 billion at the beginning of 2021 to $3 trillion in November before dropping to $2.2 trillion by the end of 2021 as prices of multiple cryptocurrencies drop from record levels during the year.

Cryptocurrency products and funds saw a 36 percent jump in inflows during 2021 compared to the previous year, as institutional investors continued to bet on digital assets amid price volatility and uncertainty throughout the year. In its annual summary of digital asset fund flows, digital asset manager CoinShares said inflows increased from $6.8 billion in 2020 to $9.3 billion in 2021 even as growth from 2019 to 2020 rose dramatically at 806 percent.

“We believe this is a mature industry, with total assets under management (AuM) ending the year at $62.5 million in 2021 versus just $2.8 billion at the end of 2019,” James Butterfell, investment strategist at CoinShares wrote in a report on Tuesday. Bitcoin had the maximum AUM share at $39.7 billion, while 2021 inflows were at $6.3 billion, with 16 percent annual growth from $5.4 billion in 2020.

However, Bitcoin saw the lowest growth in inflows compared to other digital asset investment products in 2021. For example, Ethereum saw 50 percent growth from $920 million to $1.3 billion despite being in the latest round of negative sentiment , saw four weeks of outflows totaling $161 million. Among other assets, Binance AUM recorded a 2,500 percent jump from $1 million to $26 million while Litecoin jumped 77 percent from $77 million to $93 million. Ripple also jumped 1,160 percent from $5 million to $63 million.

Also Read: India Gets First Crypto Index to Track the Performance of Bitcoin, Ethereum, Shiba Inu and Other Top Coins

The cryptocurrency market cap jumped nearly 300 percent from $763 billion at the beginning of 2021 to $3 trillion in November before dropping to $2.2 trillion by the end of 2021 as prices of multiple cryptocurrencies drop from record levels during the year. According to data from Coinmarketcap.com, Bitcoin fell from around $69,000 to $46,000 while Ethereum fell from $4,800 to $3,600 and Binance Coin dropped from $675 to $511 among others during 2021.

CoinShares noted that the total number of coins in the form of an investment product increased from nine to 15. Moreover, 37 investment products were launched in 2021 compared to 24 in 2020. The total number reached 132 indicating the demand and popularity of digital assets.

Importantly, while the last week of 2021 saw third-week outflows of $32 million, the trend is for outflows to contract after the record weekly outflows in mid-December. Outflows during the week of December 13 were $142 million — the first after 17 weeks of inflows and the largest weekly outflow ever.

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