Investment in cryptocurrency-based products surged to $ 489 million last week. The indicator peaked since February this year, with Ethereum products being particularly popular.
Back in the first half of April, CoinShares reported that the flow of money into products for investing in digital assets was $ 233 million. At the moment, we see that the figure has doubled.
According to a new report by digital asset management company CoinShares, the flow of money into products for investment in Ethereum reached $ 30 million during the last week, bringing the total assets under management to a record $ 13.9 billion. The total investment inflow this year was $ 5.45 billion. Note that on Tuesday, Ethereum hit another record of $ 3,530, bringing its market capitalization to $ 393 billion.
Thus, Ethereum has taken the cryptocurrency to new heights: the market capitalization of all assets has reached $ 2.398 billion.
The biggest reason for the surge for Ethereum appears to be the growing number of developers building DeFi apps on the platform, as well as the growing institutional interest. DeFi is a crypto platform that facilitates lending outside of traditional banking institutions.
Many believe that the Ethereum limit is $ 5,000, but as events unfold, experts are beginning to lean towards a completely different figure – $ 10,000.
It is curious what will happen to the token next and how far it can go this time.
However, the largest inflow of investments was still in products related to BTC – almost $ 442 million. And since the beginning of this year – $ 4.2 billion.
Other assets besides Ethereum
XRP, DOT, BNB, and ADA-based products have seen marginal inflows, while investments in multi-asset backed instruments totaled $ 9.2 million last week.
As such, we are seeing strong growth for most digital assets, with the exception of Bitcoin Cash (BCH). The outflow of funds from BCH-related products amounted to $ 1.7 million. It is about 10% of the total volume of assets under management.
Interest in cryptocurrencies has skyrocketed over the past year. This is due to the increased institutional interest of large companies, for example, the car manufacturer Tesla or the payment giant Paypal.
Regarding changes in the flow of funds to digital assets, CoinShares said that due to the trading range lasting since February, some investors are starting to take more mercantile positions. While others have capitulated and taken profits.
As we can see, the influx of new investors into the cryptocurrency market, and, accordingly, money can provoke a rise in the price of many coins, which in turn will attract even more buyers.
However, in the long term, a sharp rise in demand could lead to a collapse in coin prices. The larger the influx of people, the faster the bubble will inflate? The events of 2020 have once again proved to us that nothing is permanent in the world. All that remains is to observe the market situation.