Massive Capital Inflows Recorded In 3 Months As Institutional Crypto Asset Spike

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As per the data from CoinShares, a weekly inflow of $139 million has been recently observed to take place in the crypto industry, pointing to large institutional investments into cryptocurrency holdings, the highest in three months.

The latest development is a quick increase from last week, which records an outflow of $47 million. More than half of the huge inflow goes to Bitcoin, with Solana also getting a slice of the pie as it achieved another milestone in the process.

According to the weekly report of the Digital Asset Fund Flows, investment products for digital assets recorded an inflow to the tune of $193 million the previous week, a feat that has not been achieved since the December milestone.

The last trading period an investment of such scale took place was in the early weeks of December 2021, where $184 million of funds was recorded to have made its way into the industry.

Bitcoin inflows form the bulk of the fund inflows, with about 50% of the funds geared to BTC-related products. The total value of the funds moved to Bitcoin is $98 million.

Solana followed closely behind with $87 million in inflows for the week. Solana’s figure, according to CoinShares, is the single largest that the network has managed to achieve. As it stands, the funds in Solana represent about 36% of assets managed by institutional firms. While the largest altcoin, Ethereum, followed behind Solana with funds inflows for the week of $10.2 million.

Funds Contributors

The bulk of the inflows came from Europe, which was not surprising because crypto firms felt energized after news broke out that the bill in the EU parliament proposed to ban the activities of Proof-of-Work (PoW) mining failed to garner the required number of votes needed to move the motion forward.

For emphasis, comparing the latest data to the one obtained last shows that $49.4 million was withdrawn from the Bitcoin and Ethereum networks, mostly by North American companies, due to concerns regarding crypto regulations which were not clear at that time. There were fears about what the digital currency industry might become, and the absence of official clarification does not help either.

The fund’s inflow from institutional companies coincides with the rise in the price of Bitcoin, which saw the value of the BTC move above $48,500 at one point. The same argument can be made for Ethereum, which also enjoyed a price surge by breaking out above the $3,300 mark.

Last week, executives from cryptocurrency firms Nexo and Amber Group discussed the rapid growth of institutional investments in the industry during the Blockchain Africa Conference 2022.

The pair noted a noticeable increase in institutions joining the crypto industry, but some barriers limit the entry of others. But the co-founder of Nexo, Kalin Metodiev, disclosed that the only barrier is that most firms looking to join the industry always claim the crypto market is volatile. They are not risk-averse to venturing into such an industry.

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