- Inflows into crypto more than tripled last week to the highest amount since July 2022.
- The bulk of the funds went into bitcoin as the cryptocurrency’s price has soared to kick off 2023.
- Investors veered away from products that made short bets on bitcoin.
Inflows into cryptocurrency investment products more than tripled last week, with the swift spike concentrated in bitcoin as the world’s most popular token headed for its strongest January performance in nearly a decade.
Investment in digital assets rose to $117 million, the largest amount since July 2022, digital asset management firm CoinShares said in a weekly update published Monday. The bulk of that amount—$116 million—was poured into bitcoin.
A week earlier, inflows into crypto products clocked in at $36 million, but 68% went into short-investment products or those that profit when the price of the underlying asset falls.
The funding wave accelerated as bitcoin’s price continued to rise from the start of 2023. This month through mid-Monday trade, the cryptocurrency has soared about 40%, putting it on track for its best January gain since 2013. It traded at around $23,125 on Monday.
The inflows into short-bitcoin products were “minor” last week, at $4.4 million, CoinShares said.
Bitcoin has been in recovery mode so far this year after its 64% plunge in 2022.
“[Speculators] believe that bitcoin’s winter is over,” Naeem Aslam, chief market analyst at AvaTrade, said in a note late last week. At the same time, weakness in the US dollar as the Federal Reserve appears closer to pausing rate hikes has supported price gains for bitcoin and other cryptocurrencies, he said.
Total assets under management in investment products have risen 43% from their lows in November to $28 billion.
Geographically, Germany last week drew in the highest inflow amount, with 40% at $46 million. Canada logged $30 million, the US pulled in $26 million, and Switzerland landed $23 million.