Institutional Crypto Holdings Hit Two-Year High: CoinShares

Major financial institutions are ramping up their crypto exposure, currently holding $59B in assets under management (AUM), according to CoinShares’ latest Digital Asset Fund Flows Weekly Report.

The $60B mark has not been seen since the last week of February 2022, when institutions held $60.9B.

“From all the conversations we have had with many clients, they are buying for diversification and enhancing risk-adjusted returns in portfolios,” said James Butterfill, head of research for CoinShares.

Inflows topped $1.1B over the past seven days, with Bitcoin comprising 98% of total flows. BTC briefly topped $50,000 today for the first time since December 2021, a 16% increase on the week.

Bitcoin's commanding the overwhelming majority of inflows highlights that there is significant interest in spot Bitcoin ETFs from Wall Street and its clients, indicating that investors are increasingly looking for exposure in the digital asset industry.

Butterfill told The Defiant that CoinShares runs a quarterly survey which tracks $1T of AuM. According to him, 27% buy for speculative reasons, while over 40% buy for diversification and exposure to distributed ledger technology.

Altcoins did not receive much buy pressure from institutions in the past week, however.

Ethereum enjoyed $16.5M worth of inflows, bringing its yearly net flow total to $13M. Cardano followed with $6.1M accumulated by large entities.

Butterfill also referred to a spot Ethereum ETF, with the first SEC approval deadline set for May 2024. His research suggests considerable anticipation and optimism surrounding the potential launch.

“Significant buying activity activity is anticipated to occur,” he said, pointing out that Bitcoin outperformed Ether after the spot ETFs launched on Jan. 11.