Record-Breaking Quarter: $4.2 Billion Allocated in Crypto Assets in Q1 2021

Although Q1 2021 has a few more weeks left, it has already broken the record in terms of the most substantial inflows in cryptocurrency assets with over $4.2 billion, informed a report from CoinShares. Interestingly, Ethereum has skyrocketed in popularity among investors as it has garnered roughly 50% of the total flows in recent weeks.

$4.2B in Crypto Since 2021’s Start

It’s no longer a mystery whether or not bitcoin and the cryptocurrency space have started to attract heavy inflows, even from institutional investors and large corporations. The entrance of names such as MassMutual, MicroStrategy, One Asser River Management, and, yes, Tesla signified BTC’s place among the prominent financial names.

Data provided by the digital asset investment manager, CoinShares, supports this narrative. In a recent report exploring the inflows in the cryptocurrency field, the firm said that investors allocated $3.9 billion in total in digital assets during the last quarter of 2020.

While that was a record of its own, the still on-going Q1 2021 has already broken it. After another positive week in mid-March with inflows worth $242 million, the total amount allocated in cryptocurrency assets is now over $4.2 billion in the first three months of the new year alone.

It’s worth pointing out that apart from bitcoin, which has been the undisputed leader during most weeks, Ethereum has enjoyed a stable increase in inflows as well. Furthermore, ETH even surpassed BTC in the second week of March by comprising almost 50% of the total flows.

$1B AUM on Five Asset Managers

CoinShares’ paper also indicated that the number of digital asset investment product providers with at least $1 billion in AUM has grown to five.

Grayscale leads the way as the founded in 2013 asset manager has grown its AUM by more than 2x since the start of the year to north of $45 billion. Interestingly, the company had just $2 billion at the end of 2019 – meaning an increase of 22-fold in roughly 15 months.

The report also highlighted a relatively new concept in the cryptocurrency space – exchange-traded funds. Bitcoin has already seen several approvals for such products following its performance. The first one came in early February in Canada.

The Ontario Securities Commission (OSC) greenlighted the Purpose Bitcoin ETF, which has enjoyed massive success so far. In its first month of existence, the product attracted over $1 billion in AUM.

Canada’s regulator approved another one shortly after, while the US continues to reject all filings. On the other hand, Latin America will also have a BTC ETF released by a Brazilian crypto asset manager.