Investments in different crypto funds and commodities reached $4.5 billion in the first quarter of 2021, which signifies the persistent growth of investments in the industry by institutional investors.
According to a Reuters article referring to a report from CoinShares, investment in crypto funds and commodities rose by more than 11% from $3.9 billion in the last quarter of 2020 to $4.5 billion in the first three months of the current year. Nevertheless, the increase of investment in cryptocurrencies in the opening quarter of 2021 slowed down when compared with the pace of the second half of 2020.
As revealed by the CoinShares data, in Q4 of 2020, investments in the crypto sphere increased by 245% compared to Q3 of 2020. Analysts, however, note that this does not “imply a broader trend towards slow down, because quarterly growth rates have a tendency to commonly vary.”
At the start of the current week, the cryptocurrency market capitalization exceeded $2 trillion, while the Bitcoin market cap alone goes beyond $1 trillion. According to CoinShares, BTC scored the highest investment influx in Q1 with $3.6 billion, followed by ETH that attracted $760 million.
The overall amount of crypto assets under fund management climbed to a new record of $60 billion. In 2020, this figure was $37.5 billion. Grayscale stays the leading crypto asset manager with $46.3 billion under its belt. CoinShares, the second largest worldwide and biggest European digital asset manager, operates almost $5.2 billion in crypto assets.
The excessive volatility of cryptocurrencies is frequently cited as one of the explanations why Wall Street investors to a large extent shy away from investing in Bitcoin and other crypto. Nonetheless, JPMorgan analysts think that the indicator will eventually stabilize and attract new institutional investors.
