Crypto inflows surge to record $9 billion in 2021 so far; total AUM crosses $80 billion

By: |
Updated: November 16, 2021 5:17 PM

Among all digital assets, Bitcoin recorded the majority of inflows $98 million, pushing its AUM to a record $56 billion. The YTD Bitcoin inflows stood at $6.5 billion.

Altcoin inflows were led by Cardano with $16 million inflows last week. (image: Pixabay)

Crypto mania continues to attract investors worldwide as investments into cryptocurrencies and other digital assets witnessed inflows totalling $151 million last week — the 13th consecutive week of inflows. This brought the year-to-date (YTD) inflows to a record $9 billion, according to the data shared in the digital asset management firm CoinShares’ weekly report on digital asset fund flows. The intra-week price rise also saw total assets under management (AUM) reach record highs of close to $87 billion even as it closed the week at $83 billion. Among all digital assets, Bitcoin recorded the majority of inflows — $98 million, pushing its AUM to a record $56 billion. The YTD Bitcoin inflows stood at $6.5 billion despite its “dominance (relative performance) versus altcoins” waning over the week.

“The obvious first-mover advantage Bitcoin had paved the way for the entire industry. Over the past decade, bitcoin evolved in the eyes of investors from a scam or a bubble to a serious financial product. Many altcoins are just bitcoin clones or cash in on the ‘bitcoin’ name. But only Bitcoin jumpstarted the entire industry, and its price dictates the entire market sentiment. Bitcoin’s secure network adds credence to the fact that the network is extremely secure. Exchanges have been hacked not the BTC network,” Darshan Bathija, CEO and Co-Founder of Vauld told Financial Express Online.

Also read: Parliamentary panel meet on crypto: Consensus emerges on regulating cryptocurrency in India

However, altcoins have also recorded significant growth. For instance, Ethereum saw continued inflows totalling $17 million last week with total AUM pushing past $21 billion for the first time. Altcoin inflows were led by Cardano with $16 million inflows last week. According to CoinShares, the inflows are likely being due to increasing positive investor sentiment for “World computer” coins. Solana, Polkadot, and XRP also saw inflows of $9.8 million, $5.2 million, and $3.1 million respectively.

For investors to invest in altcoins, what needs to be taken into account is the project’s reliability and key characteristics. When it comes to digital assets, one needs to look at the collective trust a coin’s community places in the underlying mechanism of the project. “Other features that contribute to a project’s USP include its supply conditions and its Raison d’etre. Whether the coin’s supply is finite or not can determine its worth. Every project tries to solve a bigger problem, and this narrates the coin’s reason for existing in the market. Other points to research on include transaction cost, transaction speed, divisibility,” added Bathija.

While flows have been positive recently for digital assets, CoinShares noted that the volumes have been subdued volumes in 2H 2021, averaging $750 million daily versus $960 million in 1H.

The suggestions/recommendations around cryptocurrencies in this story are by the respective commentator. Financial Express Online does not bear any responsibility for their advice. Please consult your financial advisor before dealing/investing in cryptocurrencies.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Wall Street leaps as Nasdaq rallies 3% on boost from Big Tech, chipmakers
2Rategain Travel IPO subscribed 41% on Day 1 of offer
3Decline in prices of Bitcoin, others hit crypto fund inflows, leads to $40m outflows: Report