The recent data from digital currency manager Coinshares reveals that in the first quarter of 2021 the inflows into cryptocurrency funds and products reached a $4.5 billion record, indicating increased institutional participation in the sector.
Even though, investments into crypto slowed in the first quarter compared with the fourth of last year where growth was 240 percent, the inflows in the Q1 of 2021 represented an 11 percent increase from the last three months of 2020, which hit $3.9 billion.
In its report, Coinshares said that “this was not indicative of a broader slowing trend, as quarterly growth rates tend to be highly varied.” Last day, the cryptocurrency sector posted an all-time record of $2 trillion in market capitalization. Bitcoin’s market cap was over $1 trillion.
“There’s so much momentum that’s building and people are scrambling to see where the other coins, aside from bitcoin, are going,” said Edward Moya, senior market analyst at online FX trading platform OANDA.
According to the report of Coinshares, Bitcoin had the most inflows in the first quarter with $3.5 billion, followed by ethereum, which posted $765 million in investments. Crypto assets under management have also surged to a peak of $59 billion. Last year, assets under management for the sector marked $37.6 billion.
The data further revealed that the American crypto asset management firm Grayscale is the largest digital currency manager with $46.1 billion in assets, while CoinShares, the second biggest and the largest European digital asset manager, oversees about $5.1 billion in assets.
Out of the $59 billion in assets under management, the active investment managers represented only 1.5 percent, down from 3.6 percent at the start of the fourth quarter last year. The total market volumes remained high during the quarter, averaging $11.6 billion per day, compared with $3.5 billion in the last three months of 2020.