Crypto funds generated $9.3B in 2021 due to institutional fondness

• Avinandan Banerjee
• January 05, 2022

The year 2021 can be enlisted as one of the biggest milestones for the industry as crypto fans sailed through massive surges and unforeseen falls in an overnight span. Where some investors pooled juicy earnings with limited investment, others recorded some serious losses to their portfolios. However, amid all this chaos, crypto continued to rule the finance sector setting new records for the industry.

With this said, a research report released by CoinShares data has unfolded the super success of cryptocurrencies in the past year. According to the report, crypto institutional products fetched a whopping $9.3B in inflows during 2021, showing a $6.8B increase from the 2020 figures. The surprising rise in crypto investment projects can be attributed to the increase in demand for top-tier virtual assets like Bitcoin (BTC) and Ether (ETH). The industry continued to climb the charts despite the prevailing volatility and unpredictable trends in the market space.

As per the official data report, Bitcoin funds pooled $6.3B worth of investments through the year whereas Ether witnessed inflows worth $1.4B in the same time frame. A serious growth was recorded in the multi-asset funds sector where investment capital inflows reached $775M in value. The year saw the launch of 37 investment solutions in comparison to 24 project launches in 2020. Crypto assets included in the investment cluster rose from 9 to 15 in 2021 hinting towards the popularity rise for crypto space.

Leading asset management firm, Grayscale became the single biggest crypto asset managing platform with $43.5B in assets under the management category. Other notable firms in asset management services included 3iQ, 21Shares, ETC Group, Purpose, and ProShares.

01/03/22 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.

Total AUM: $43.5 billion$BTC $BAT $BCH $LINK $MANA $ETH $ETC $FIL $ZEN $LTC $LPT $XLM $ZEC $UNI $AAVE $COMP $CRV $MKR $SUSHI $SNX $YFI $ADA $SOL $AMP pic.twitter.com/67Pb7xneoQ

— Grayscale (@Grayscale) January 4, 2022

The investors who deal in cryptocurrencies are well-aware of the high volatility market conditions of the industry. The crypto market space is known to experience sudden changes in trends with price charts fluctuating frequently. Despite this, crypto enjoyed a slow yet steady surge in 2021 as the industry managed to expand its clientele as well as operational capacities across the world. The multi-billion-dollar industry became a multi-trillion-dollar industry in 2021 making it a hot shot option for business houses and retail investors. The launch of BTC ETFs in multiple regions exposed people to crypto use. The Purpose BTC ETF in Canada is likely to help investors in North America to try their luck in crypto.

The regulatory authorities encouraged institutional adoption of cryptocurrencies by approving futures-linked ETF projects. The SEC is likely to give its verdict on physically-pegged Bitcoin funds from NYSE Arca and Grayscale in February 2022. The institutional inclination towards crypto is likely to grow with continuous investor movement in the sector.