Financial Institutions Show Insatiable Appetite for Cryptocurrency with Trading Volumes Surging to a New Record of $30 Billion

Recent weeks have seen a significant upsurge in the volume of investments flowing into cryptocurrency products, culminating in an all-time high trading volume just last week. A report from CoinShares indicates that digital asset funds absorbed $1.84 billion in inflows, marking the second-largest amount in its history. It is particularly striking that cryptocurrencies funds’ inflows boosted the trading volume beyond the $30 billion mark over a one-week period for the first time.

Intensified Institutional Interest in Crypto

The latest weekly trading volume for investment products has surpassed the previous 2021 peak, extending past the $30 billion threshold. This surge is synchronous with the recent bullish performance of most cryptocurrencies.

The current market landscape shows that institutional players and big-ticket investors are making a beeline for crypto assets, notably Bitcoin. This influx of institutional engagement is a major factor fueling an escalation in trading volumes across cryptocurrency exchanges. 

With the launch of Spot Bitcoin ETFs in the USA, the fascination with Bitcoin among these institutions has soared, resulting in a remarkable weekly trading volume for Spot Bitcoin ETFs of over $22.3 billion. Despite a withdrawal of $1.45 billion from Grayscale’s ETF, last week ended with Spot Bitcoin ETFs achieving a net inflow of $1.72 billion.

Per CoinShares’ data, Bitcoin dominated the week, capturing $1.73 billion, which is a staggering 94% of the total inflows into investment products. In certain instances, these funds accounted for half of the global Bitcoin trading volume on exchanges for the day. 

Ethereum continued to lead the altcoins, drawing in $84.7 million and accruing a total of $137 million in net inflows this year. This represents the largest weekly inflow since mid-July 2022, despite being 38% below its maximum assets under management, which once stood at $23.7 billion.

XRP, Chainlink, and Litecoin all experienced noticeable inflows of $2.5 million, $1.6 million, and $1.2 million respectively. Meanwhile, bearish investors allocated $22 million into short-Bitcoin investment products.

Conversely, Solana experienced a drawdown of $11.9 million this past week, and has yet to see a positive flow with a year-to-date total of $14 million in outflows. Multi-asset products also witnessed minor outflows amounting to $0.3 million. 

Regarding geographic distribution of the inflows, the United States took the lead with $1.88 billion, followed by Switzerland with $19.6 million, Australia with $3.7 million, and Brazil with $2.7 million. In contrast, Canada, Germany, and Sweden were marked by net outflows of $23.1 million, $34.8 million, and $31.6 million respectively.

The crypto market's total cap stands at $2.44 trillion | Source: Crypto Total Market Cap on Tradingview.com

Featured image from BitIRA, chart from Tradingview.com