NEW YORK (Reuters) – Investment flows in cryptocurrency funds and products hit a record $ 1.31 billion last week after a few weeks of small outflows as investors took advantage of the decline in bitcoin and other digital asset prices, according to the latest data Monday from asset manager CoinShares.
Total assets under management (AUM) in the sector fell to $ 29.7 billion on January 22, from a record high of $ 34.4 billion on January 8. At the end of 2019, the total AUM was only $ 2 billion.
Grayscale, the world’s largest digital currency manager, posted $ 24 billion in assets under management last week, down from $ 28.2 billion on Jan. 8. CoinShares, the second largest crypto fund, managed assets of $ 2.9 billion in the past week, also down from $ 3.4 billion on Jan. 8.
“We believe investors have been very price conscious this year due to the speed at which bitcoin prices hit new highs,” said James Butterfill, investment strategist at CoinShares.
“The recent price weakness, prompted by recent remarks from Treasury Secretary Janet Yellen and unfounded concerns about double spending, now appear to be a buying opportunity with inflows breaking the all-time weekly inflows,” he added.
Bitcoin fell to a low of $ 28,800 on Friday, after a record high of $ 42,000 on Jan. 8. It was down the last 0.5% at $ 32,124.
About 97% of the inflows went to bitcoin, the data showed, with Ethereum, the second-largest cryptocurrency, posting an inflow of $ 34 million last week.
This year, volumes in bitcoin have been significantly higher so far, with an average trade of $ 12.3 billion per day, compared to $ 2.2 billion in 2020.
Glassnode, which provides insights into blockchain data, said in a report Monday that bitcoin’s net unrealized gain / loss (NUPL) nearly crossed the range of ‘belief’ and moved into the range of ‘euphoria’.
When NUPL got into this range earlier, it signaled a global spike in bitcoin price.
Reporting by Gertrude Chavez-Dreyfuss; Editing by Richard Chang