Digital asset investment products saw $2.25 billion of inflows in 2023, marking it as the 3rd largest year for inflows since 2017, according to the newest report by CoinShares. The inflows represented a dramatic turnaround from 2022 when they totaled just $831 million.
Their visible acceleration since the year's second half shows the industry's eager anticipation for introducing the first-ever Wall Street BTC spot ETF.
Digital Asset Funds See $2.25 Billion Inflows in 2023, Rebounding from 2022
Assets under management (AuM) ended 2023 at $51 billion, the highest level since March 2022. Bitcoin was the prime beneficiary of the resurgence in interest, attracting $1.9 billion inflows, or 87% of the total. This dominance of flows was the largest on record.
Much of the rebound came in the fourth quarter, as it became clear the US Securities and Exchange Commission (SEC) was warming up to approving Bitcoin spot ETFs. The market is currently eagerly awaiting the approval of the first application, which has driven the price of BTC this week to its highest levels since April 2022.
For Bitcoin, this is a significant period as it just celebrated its 15th anniversary of mining the first-ever BTC block, known as the “Genesis block.”
The latest report from the Bitget exchange for 2023 confirms the growth in Bitcoin market activity, which mentions an increase of 12 million in users and a jump of 94% in spot volumes.
While Bitcoin roared back, Ethereum (ETH) lagged despite a recovery of inflows to $78 million. Its share of total AuM remained muted at 0.7%. Solana was a bright spot amongst altcoins, benefitting from Ethereum's woes to notch $167 million in inflows.
Germany, Canada and Switzerland on Crypto Lead
By region, Germany saw the largest inflows as a percentage of AuM at 22%, followed by Canada and Switzerland at 15% and 13%, respectively. The US saw the most nominal inflows at $792 million, but its share of AuM was only 2%.
Equity investment into blockchain companies additionally rebounded in 2023, with assets doubling from 2022 levels.
CoinShares publishes its reports on flows into cryptocurrency funds every month. The latest report summarized the entire year of 2023 and signaled renewed investor enthusiasm for the crypto asset class, driven overwhelmingly by Bitcoin. With the prospect of a spot Bitcoin ETF in 2024, another year of strong inflows may be ahead.
According to the latest information, Goldman Sachs also wants a piece of the Bitcoin ETF pie, reportedly considering a partnership with BlackRock and Grayscale, who have applied to introduce such an instrument.
