Institutions Now Own 5% of Bitcoin Supply; $335 Million Flowed into Crypto Funds Last Week
Institutions continue to rush into BTC; this month, they put $792.1 million into Bitcoin and $207.3 million in Ethereum.
Total inflows into cryptocurrency funds have increased by 660% from last year to reach $5.57 billion in 2020, according to the latest data from asset manager CoinShares.
“This massive increase has likely been influenced by improving investor outlook for the digital asset class,” especially for Bitcoin, which is being seen as a hedge against inflation and as an alternative to the depreciating dollar.
Bitcoin hit another all-time high around $24,300 on Sunday, only to struggle around $22,500 this week after falling to $22,100. Today, Ether dropped under $600.
Julius de Kempenaer Senior Technical Analyst at StockCharts
“The current jump will certainly attract new retail money, but we are also already seeing adoption by more institutions. I think the question is whether institutions can afford not to participate, and for how long.”
According to him, there are a few big players in the crypto space, and it is “mostly crowded with retail-related traders and investors.”
Last week, in terms of weekly flows, crypto investment products saw investment totaled at $335 million, with Bitcoin flows accounting for just over $313.8 million and Ethereum $7.6 million.
As for this year, so far, investors have pumped $15.6 billion into Bitcoin funds and products, while Ethereum saw $2.5 billion in inflows.
Institutions actually hold about 5% of Bitcoin’s current supply, with Grayscale being the largest institutional bitcoin holder by the market value of their position, noted Tradeblock.
The world’s largest crypto fund, Grayscale, had $250 million inflows in the latest week, which raised its AUM to $15.3 billion. Grayscale has amassed inflows of nearly $5 billion this year so far, the CoinShares report said.
This past week, a surge of new institutional buyers into bitcoin was seen as One River, and Ruffer Investments revealed their large stakes in bitcoin.
One River holds approximately $600 million in bitcoin, executed through Coinbase’s OTC desk, and plans to increase its stake in bitcoin and ether to $1bn in Q1 2021. Ruffer also revealed that it holds more than $750 million in bitcoin — 2% of the fund’s AUM.
Additionally, Michael Saylor’s MicroStrategy completed its $650 million notes offering last week. On Monday, they announced that they bought more BTC with its proceeds, which is “the most continuous large block buying by institutional investors ever.”