The total weekly inflows in crypto-related investment products reached a record high of $1.31 billion last week after minor outflows in the previous weeks. Institutional investors still prefer Bitcoin over other digital assets as the world’s largest cryptocurrency accounted for 97% of the total weekly inflows.
According to a report published by CoinShares, Europe’s largest crypto asset management firm, the average daily trading volume of Bitcoin jumped significantly in 2021. So far this year, BTC has had an average trading volume of $12.3 billion per day, compared to just $2.2 billion in 2020.
Overall, Bitcoin accounts for 83% of the total digital assets under management, but the 97% weekly inflow into BTC shows that investors have more confidence in Bitcoin as compared to other crypto assets.
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“Ethereum saw inflows of US $34m last week, although investors have been cautious, with little inflows since early December. Despite the record inflows, investment products have not tested the liquidity of the underlying Bitcoin, with investment products representing only 6.5% of total Bitcoin trading turnover,” the report states.
Bitcoin Price Action
The report by CoinShares mentioned that significant volatility in Bitcoin this year has made investors more price-conscious. BTC achieved an all-time high of $41,500 earlier this month after a record-breaking price rally. Bitcoin has lost nearly 25% of its value after registering a record-high and the world’s most valuable cryptocurrency is now trading near $31,000. Additionally, Ethereum registered an all-time high of $1,470 yesterday after posting nearly 20% gains over the weekend.
“We believe investors have been very price-conscious this year due to the speed at which prices in Bitcoin achieved new highs. The recent price weakness, prompted by recent comments from Secretary of the US Treasury, Janet Yellen and the unfounded concerns of a double spend, now looks to have been a buying opportunity with inflows breaking all-time weekly inflows. So far this year, volumes in Bitcoin have been considerably higher, trading an average of US$12.3bn a day compared to US$2.2bn in 2020,” CoinShares mentioned in the report.