Investments in crypto funds and products reached $ 4.5 billion in the first quarter, which indicates the continued growth of investments in the sector from institutional investors.
According to a Reuters publication citing a report from Coinshares, investment in crypto funds and products rose 11% from $ 3.9 billion in the last quarter to $ 4.5 billion in the first three months of this year. However, the growth of investment in cryptocurrencies in the first quarter of 2021 slowed down compared to the pace of the second half of last year.
According to Coinshares, in Q4 2020, investments in the cryptocurrency sector grew by 240% compared to Q3. Analysts note that this does not “indicate a broader trend towards slowing, as quarterly growth rates tend to vary widely.”
At the beginning of this week, the cryptocurrency market capitalization surpassed the $ 2 trillion mark, and the Bitcoin market capitalization is over $ 1 trillion. According to Coinshares, BTC had the highest investment inflow in Q1 with $ 3.5 billion, followed by ETH with $ 765 million.
The volume of cryptoassets under management also rose to a new high of $ 59 billion. Last year this figure was $ 37.6 billion. Grayscale remains the largest cryptoasset manager with $ 46.1 billion under management. CoinShares, the second largest and largest European digital asset manager, controls nearly $ 5.1 billion in crypto assets.
At the end of March, CoinShares released a weekly report on investments by financial institutions in cryptocurrency products, noting that new institutional investors’ investment in bitcoin had dropped to October 2020 levels.
The volatility of cryptocurrencies is often cited as one of the reasons why Wall Street investors shy away from investing in bitcoin. However, JPMorgan analysts believe that the indicator will normalize and attract more institutional investors.