Investors poured a record $2.7 billion into crypto assets last week, bringing the year’s total inflows to more than $10 billion. According to CoinShares, which tracks digital asset investments, the annual crypto inflow record set in 2021 is expected to be surpassed sometime this week.
The biggest reason for all of this is the 11 ETFs built around bitcoin that were introduced earlier this year. Bitcoin-related ETFs accounted for $2.6 billion of last week’s inflows, now representing 14% of bitcoin assets under management.
Leading the way was BlackRock’s IBIT ETF, which reported an inflow of $562.9 million. On March 5, when bitcoin reached a new all-time high, IBIT saw a record inflow of $788.3 million in a single day. Fidelity’s FBTC recorded an inflow of $215.5 million.
As the price of bitcoin continues to soar, more investors are enticed to jump in. The price set another record at $72,000 as of March 11. The CoinMarketCap Crypto Fear & Greed Index has reached “extreme greed” territory at 89.12 points, up from “neutral” at 59.3 points in early February.
Tech’s Loss Is Crypto’s Gain
Amid the surge in crypto inflows, investors withdrew funds from technology stocks a record pace, with $4.4 billion in outflows exiting over the same week. Tech stocks had a rough week in the market, so it’s hard to say if money was moving out of a desire for crypto or because investors are souring on tech.
But investors shouldn’t necessarily see the runup in crypto assets as a sign of further growth in the price of bitcoin of other digital assets.
“Usually fund flows don’t start moving like this when prices are low,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “The investment industry is the only industry out there where people don’t flock to sales when the assets are cheap. I’m not surprised that we’re seeing record flows as bitcoin’s price is hitting new all-time highs.
“I think the question will be how this chart will look on any significant price pullback or reversal,” he said. “Will it revert to people running out the door rather than buying investments that are on sale, or will they continue to accumulate in this trend regardless of price?”
