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Investments in crypto funds at highest level since 2021

29 Nov, 2023
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Ahead of the emergence of spot Bitcoin ETFs in the US, institutional investors have doubled down on investments in cryptocurrencies. In the past week alone, they invested $346 million in exchange-traded crypto funds, the largest inflow of funds since late 2021. In total, they've invested $1.7 billion during the year.

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Bitcoin is leading with a wide gap, accounting for $1.6 billion or 93% of the total volume. Solana is second with $138 million in investments during the year. We gave a detailed explanation of the altcoin's popularity here.

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Investors from the United States represented the first wave of demand for cryptocurrencies. They're now joined by investors from Canada and Germany. The total volume of crypto assets under management has reached an 18-month high of $45.4 billion.

Image source: jbutterfill.medium.com

The increased attention of institutional investors is also seeing an open interest on the CME, where it grew from $1.3 billion to $4.1 billion over the course of a year. This is close to the high in 2021 when the figure reached $5.5 billion.

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Investor activity is associated with the potential emergence of spot ETFs in the United States, which will attract a significant amount of investment and cause Bitcoin's price to strengthen.

Image source: StormGain cryptocurrency exchange

The chances of ETFs being approved increased after an agreement between Binance and the US Department of Justice since the crypto exchange's exit reduces the risks of capital outflow from the country. The American division's strong dependence on the parent company was one aspect that received much criticism.

Galaxy Research estimates that ETFs will raise $14.4 billion in the first year and $125 billion to $450 billion over the long term.

Image source: galaxy.com

The flow of investments will lead to the cryptocurrency's price rising by 6.2% in the first month after the ETF's launch and by 74% during the year. If the funds are approved today, Bitcoin could be worth $64,000 by December 2024.


StormGain Analytical Group 
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