Institutional investors poured in record $9.3 billion into crypto funds in 2021

Global crypto-themed funds witnessed record net inflows of $9.3 billion during 2021, a 36% increase over 2020 as institutional adoption grew in a breakout year for crypto assets, said digital asset manager CoinShares in a report.

The report further said that the total number of crypto assets or coins in investment product form expanded from nine to 15 during the year. Additionally, 37 investment products were launched in 2021 versus 24 in 2020, making a total of 132 products at present, indicative of the demand and popularity of digital assets.

“While the increase from 2019 to 2020 was significantly higher at 806%, we believe this represents a maturing industry, with total assets under management (AUM) ending the year at $62.5 billion in 2021 versus just $2.8 billion at the end of 2019,” CoinShares said.

The total AUM of global crypto funds had reached above $70 billion during November 2021 just when the bitcoin price was hovering around the $69,000 level. The price of the world’s biggest crypto asset has since then slumped below the $50,000 mark is trading around the $46,500 zone.

The report further added that bitcoin saw net inflows of $6.3 billion in 2021 versus $5.4 billion last year, showing an increase of only 16%. On the other hand, the world’s second-biggest crypto asset, ethereum, saw inflows doubling from $920 million in 2020 to $1.3 billion in 2021.

Multi-asset funds that offer multiple crypto assets saw net inflows of $775 million during the year against $352 million last year.

However, for the week ended 31 December, crypto funds saw the third straight week of outflows totalling $32 million, with the trend suggesting diminishing outflows following the record weekly outflows in mid-December ($142 million).

In terms of crypto fund providers, the world’s biggest digital asset manager, Grayscale, remained steady with total assets under management (AUM) of $43.23 billion, followed by CoinShares at $4.75 billion and 3iQ with an AUM of $2.52 billion.

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