Institutional Investors Piled Into Bitcoin In 2023

Inflows to institutional crypto products tagged $2.25B in 2023, the third strongest year on record

By: Pedro Solimano Loading...

Institutional Investors Piled Into Bitcoin In 2023

Institutional investors loaded up on crypto last year, with traders betting big on Bitcoin.

Investors accumulated $2.25B worth of crypto exposure via institutional products during 2023 — equating to 2.7 times that of 2022, according to CoinShares’s latest Digital Asset Fund Flows report.

The value of assets under management reached $51B, a 129% increase on the year. This figure was also bolstered by rising cryptocurrency prices, with Bitcoin (BTC) up 160% in the past year, Ethereum (ETH) gaining 80%, and Solana (SOL) surging by more than 900% over the same period.

SOL and BTC favored by institutions

The report, compiled by James Butterfill, head of research for CoinShares, shows institutional traders loaded up on digital assets during Q4 2023 with more than $1.5B in inflows as many investors fearing missing out amid rampant spot Bitcoin ETF speculation.

BTC was the most heavily favored digital asset among institutions in 2023, with inflows topping $1.9B or 84.5% of the annual total. Bitcoin also accounted for 87% of total flows to and from institutional products for the year.

BTC last changed hands for nearly $43,900, according to CoinGecko, Bitcoin’s market cap currently sits at $859B, boasting a 49% dominance over the $1.7T combined crypto market capitalization at $1.7T.

Solana was the second most popular asset, with inflows to SOL-based products topping $167M for the year. SOL also accounted for 20% of assets managed by institutional crypto product issuers at the end of 2023.

Notably, SOL’s inflows were double that to Ethereum-based products, with ETH inflows coming in at just $78M last year. Products offering short exposure to BTC ranked fourth with $60M worth of inflows, followed by XRP with $18M.

The United States reclaimed its position as the leading country by inflows to institutional crypto products, with U.S. investors allocating $792M to the sector during 2023, up from $334M in 2022. Switzerland fell from the first in 2022 with $556M to third with $434M in 2023, while German investors overtook the Swiss with $543M — up from $213M during the preceding year.