CoinShares: Weekly Investment Inflows In Crypto Funds Hit Record; ETH Set for Massive Market Changes

Big players seem to be consolidating their positions with the latest Bitcoin (BTC) price dip and the overall crypto market correction. Crypto fund manager CoinShares told Reuters, that weekly investment inflows in crypto funds hit a record $1.31 billion last week.

Nearly 97% of the inflows went to Bitcoin while the world’s second-largest cryptocurrency Ethereum (ETH) registered $34 million net inflows.

This is a positive development after a few weeks of outflows. This shows that investors’ trust in Bitcoin and the crypto market remains intact and they are here to seize any opportunity the market correction has to offer. However, while buying takes an uptick, the total assets under management of the overall industry have slipped below $30 billion as of January 22.

It is a more than a 10% drop as the industry AUM was around over $34 billion during January 8. However, this drop has been significant due to the correction in the crypto market. James Butterfill, investment strategist, at CoinShares told Reuters:

“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 U.S. Treasury Janet Yellen and the unfounded concerns of a double spend, now look to have been a buying opportunity with inflows breaking all-time weekly inflows”.

Grayscale certainly enjoys the lion’s share in the crypto-investment-funds market with more than $24 billion in assets under management. The Grayscale Bitcoin Trust (GBTC) has been constantly buying Bitcoin and has copped more than 41K BTC since January 14, 2010. Grayscale also announced some of its new altcoin trust products two days back.

“Ethereum Is Set for Some Fundamental Market Structure Changes”

These were the exact words by CoinShares chief strategy officer Meltem Demirors during her interview with CNBC Squawk Box soon after Ethereum (ETH) hit a new all-time high on Monday, January 25. Demirors agreed that Bitcoin is the first choice of institutions for investments since the BTC market is 10 times as liquid as the ETH market. However, speaking further about Ethereum she adds:

“We have seen quite a material run up, and when it comes to new applications, products and services that are being built many of them are being built on top of the Ethereum network”.

She further adds that CME Ether Futures could be potentially a game-changer since the cash-settled contracts will drive more institutional participation. Thus, “Ethereum Is Set for Some Fundamental Market Structure Changes,” she adds.

Talking about the latest regulatory developments, Demirors adds that regulations will be a big positive for the growth of the industry.

always fun sparring with you @andrewrsorkin – but let's please dispel the myth that bitcoin is unregulated

companies like @CoinSharesCo @coinbase @krakenfx @Gemini and others spend millions on onerous compliance – just like any other bank or financial institution! https://t.co/75K7CDo91g

— Meltem Demirors (@Melt_Dem) January 25, 2021

The recent Ethereum price surge has helped it move past some key resistance against Bitcoin.