Investments in cryptocurrency funds and products reached $4.5 billion in the first quarter of 2021, indicating a continued increase in investment by institutional investors.
According to a report by Coinshares published on Reuters, investments in cryptocurrency funds and products increased by 11% from $3.9 billion 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 fourth quarter of the last year. The fourth quarter of 2020, investments in the cryptocurrency sector increased by 240% compared to the third quarter of 2020.
Coinshares Said:
“indicative of a broader slowing trend, as quarterly growth rates tend to be highly varied.”
At the beginning of this week, cryptocurrency market capitalization broke the $2 trillion mark, and the market capitalization of Bitcoin went above $1 trillion.
The largest inflow of investments in the first quarter was in BTC – $3.5 billion, followed by ETH with $765 million.
The volume of crypto assets under management also rose to a new high of $59 billion. Last year, this figure was $37.6 billion.
Of the $59 billion in assets under management, active investment managers represented just 1.5% of total assets under management, down from 3.6% at the start of the fourth quarter last year.
Grayscale is still the largest crypto asset manager with $46.1 billion under management. CoinShares, Europe’s second-largest digital asset manager, controls about $5.1 billion worth of crypto assets.
At the end of March, CoinShares presented a weekly report on investments of financial institutions in cryptocurrency products, noting that new investments of institutional investors in Bitcoin fell to the level of October 2020.
The cryptocurrencies volatility 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.
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