Finance

Bitcoin’s Unstoppable Rise: $1B Institutional Inflows Expected in 2023 as BTC Supply Tightens






Bitcoin Institutional Investment Sees Over $1 Billion Inflows in Less Than Two Months

Bitcoin Institutional Investment Sees Over $1 Billion Inflows in Less Than Two Months

Bitcoin (BTC) and other cryptocurrencies have experienced a surge in institutional investment, with over $1 billion in new inflows in less than two months. According to a weekly report from crypto asset management firm CoinShares, this influx of capital indicates renewed interest in Bitcoin and altcoins.

The recent price gains of Bitcoin, Ether (ETH), and major altcoins have contributed to this influx. The excitement surrounding the potential approval of the United States’ first spot exchange-traded fund (ETF) has also fueled the positive sentiment in the market. Since November 2022, the total crypto market cap has increased by $600 billion, as confirmed by data from TradingView.

However, the past two months have seen a significant increase in funds being deployed to crypto investment products. CoinShares reports that “digital asset investment products saw inflows totaling US$293m last week, bringing this 7-week run of inflows past the US$1bn mark.” This brings the year-to-date inflows to US$1.14bn, making it the third-highest yearly inflows on record.

One notable statistic demonstrating the resurgence of crypto in 2023 is the assets under management (AUM) tally for crypto exchange-traded products (ETPs). This figure has nearly doubled since the beginning of the year, with a gain of almost 10% in the past week alone. The total AUM now stands at US$44.3bn, the highest since the major crypto fund failures in May 2022.

Bitcoin has been the primary focus of institutional investors, with inflows totaling US$240m last week and year-to-date inflows reaching US$1.08bn. In contrast, short-Bitcoin saw US$7m outflows, indicating continued positive sentiment.

The increased interest in Bitcoin has also prompted on-chain analytics firm Glassnode to reevaluate Bitcoin supply dynamics. According to their research, BTC being stored for the long term is outpacing the amount mined by 2.4 times. This trend is particularly significant as the next block subsidy halving is just five months away. Glassnode’s weekly newsletter, “The Week On-Chain,” comments on the upcoming halving event and its impact on Bitcoin’s return profile.

Philip Swift, creator of the statistics platform Look Into Bitcoin, emphasizes the growing adoption of Bitcoin. He points to the increasing number of wallet entities, both large and small, as evidence of adoption.

Please note that this article does not contain investment advice or recommendations. Investing in cryptocurrencies involves risks, and readers should conduct their own research before making any investment decisions.


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