The year-to-date inflows are at a record high of US$8.9 billion as per CoinShares’ weekly fund flows until 5 November. The numbers have broken last year’s record of US$6.7 billion in inflows.
The report also noted that this marks the twelfth consecutive week of positive flows in digital investment products totaling US$174b just last week. With these record inflows, market cap of the crypto market is also currently above $3 trillion.
Thanks to this, Steve Kurz, the global head of asset management at Galaxy Digital is optimistic about the industry’s future. In a recent conversation with Bloomberg, he predicted,
“I expect that you will have a number of very large assets in crypto, in our large-cap index.”
However, he agreed that the valuations of Bitcoin and Ethereum are currently massive to be competed with. But, the growth of the space is a testimony to that, according to him. He also stated,
” I would analogize the crypto funds space to the hedge-fund space in the early 2000s. There are 850 funds — it’s a shocking statistic, that people don’t understand the breadth and scope of that. “
It is noteworthy here that Galaxy Digital has two partnerships for crypto ETFs at the moment. It includes Invesco Alerian Galaxy Crypto Economy ETF (SATO) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC).
A previous report had estimated that 47% of traditional hedge fund managers, that hold close to $180 billion in assets are, in fact, looking at crypto as an asset class. It stated,
“86% of those hedge funds intend to deploy more capital into the asset class by the end of 2021.”
Meanwhile, as per a recent notice by the Chicago Board Options Exchange (CBOE), VanEck’s new Bitcoin futures ETF (XBTF) is also set to join the market on 16 November.
With institutions jumping in crypto offerings, Kurz is certain that a lot of work has been happening behind the scenes over the last four years. He said,
“Every single institution that you can think of in every vertical, they have people who have done work on this.”
Recently, former British Chancellor of the Exchequer Philip Hammond also noted in an interview that crypto in business is “unstoppable.” He told Yahoo Finance,
“This is going to happen, we have probably got to a point where this is unstoppable.”
Therefore, with institutional money, the industry can expect more Bitcoin and Ethereum-like large-cap funds. In 2021, Chainalysis Co-Founder and CEO Michael Gronger also noted an “unprecedented interest in cryptocurrencies among financial institutions.”