Crypto Investments Hit $2.2B in 2023, Promising Bullish Momentum
In 2023, cryptocurrency investment products witnessed a substantial increase in inflows, totaling $2.2 billion for the year, as reported by CoinShares. Bitcoin (BTC) emerged as the frontrunner, attracting over $1.9 billion, constituting an impressive 86% of the overall inflows. Solana's SOL followed as a distant second, with $167 million in inflows, while multi-asset and BNB exchange-traded products (ETP) defied the trend, experiencing net outflows of $18 million and $1 million, respectively.
Comparing year-to-year data, the cryptocurrency investment landscape in 2023 surpassed the figures from 2022. In the previous year, Bitcoin funds led the way with substantial inflows of $388 million, representing 47.5% of the total $816 million. Multi-asset funds followed closely with $272 million, leaving Binance with an outflow of $24 million.
The final week of 2023 saw US$243m of inflows into digital asset ETPs, bringing 2023 total flows to US$2.2bn. pic.twitter.com/EtdHQWlu2K
— James Butterfill (@jbutterfill) January 3, 2024
The momentum in the crypto fund market appeared to shift into a bullish phase starting the week of September 29. Prior to this, crypto funds had experienced outflows in eight out of the previous nine weeks.
Exchange-traded products (ETPs) play a pivotal role in this landscape, serving as investment funds designed to track the price of specific assets. Crypto ETPs typically mirror the prices of major market-cap cryptocurrencies such as Bitcoin or Ether. These investment vehicles offer investors an alternative to directly holding cryptocurrencies, allowing them to gain exposure to crypto prices by holding shares of these funds in traditional brokerage accounts.
As of January 2, the price of Bitcoin surged beyond $45,000 for the first time in nearly two years. This notable milestone coincides with anticipation in the market for the expected approval of a spot Bitcoin exchange-traded fund (ETF) in the United States.
This positive trend in cryptocurrency investment products underscores the growing interest and confidence in the crypto market, as investors seek diversified and accessible ways to participate in the digital asset space.
