Cryptocurrency inflows hit a record $ 4.2 billion, CoinShares says

NEW YORK (Reuters) – Inflows in cryptocurrency funds and products have already hit a record $ 4.2 billion for the first quarter, reflecting growing interest from institutional investors, data from CoinShares showed.

The previous high for cryptocurrency inflows was $ 3.9 billion in the fourth quarter of last year, bringing total inflows for 2020 to $ 6.7 billion, wealth manager data shows.

Bitcoin, the largest cryptocurrency in the world by market capitalization, had the most inflows this year with $ 3.3 billion, while Ethereum was second with $ 731 million.

Bitcoin hit a record high of $ 61,781.83 on Saturday, but has since fallen as investors consolidated gains and amid India’s plans to ban cryptocurrencies.

“As bitcoin becomes mainstream and captures more attention, it will likely attract more scrutiny from regulators in the US and Asia, ”said senior analyst Jesse Cohen.

On Tuesday, the virtual currency was at $ 55,415.

“The potential for more scrutiny and tighter regulation remains the biggest headwind for bitcoin,” added Cohen.

Cryptocurrency assets under management also rose to a peak of $ 55.8 billion, data from CoinShares showed. Last year, the AUM for the sector reached $ 37.6 billion. Five digital asset investment providers now oversee more than $ 5 billion in assets.

Grayscale is still the largest digital currency manager, with $ 43.73 billion in assets, while CoinShares, the second largest, oversees nearly $ 5 billion in assets.

CoinShares’ analysis also showed that investors continue to choose investment providers who simply monitor the price of digital assets – so-called passive funds – versus those that have active management strategies.

Passive funds have AUM of $ 54.1 billion, compared to $ 786 million for those with active strategies.

Reporting by Gertrude Chavez-Dreyfuss; Editing by Alexander Smith