Bitcoin leads charge as crypto fund AUMs double to $52 billion

Data from asset management company CoinShares shows that crypto funds rose 134% in assets under management (AUM) from 2022 to 2023. In 2022, investors had $22.3 billion in crypto exposure through funds. This number was $52.1 billion until December 22, according to the latest numbers shared by CoinShares.

This sharp growth in AUM can be attributed to a macro-economic movement seen in 2023, says James Butterfill, Head of Research at CoinShares. The US Federal Reserve’s shift away from raising interest rates influenced Bitcoin’s price increase in the first half of 2023.

“As an emerging store of value, Bitcoin is particularly sensitive to interest rate changes, competing with other value stores like treasuries, which become less attractive when yields fall. Additionally, high-interest rates contributed to challenges in the banking sector, including the collapse of some large banks and the Federal Reserve’s subsequent intervention to support the system. This turmoil triggered a flight to quality assets, with Bitcoin emerging as a primary beneficiary,” Butterfill explains.

The second half of 2023 was largely driven by excitement around the potential launch of a spot-based Bitcoin ETF in the United States, adds Butterfill. With 11 issuers, including the world’s largest asset manager BlackRock, applying to the SEC, along with Grayscale’s legal victory over the SEC, there was a noticeable impact on Bitcoin prices.

The flight to quality assets mentioned by CoinShares’ Head of Research can be seen in the rise of AUM shown by crypto funds indexed to Bitcoin (BTC) price, which grew 173% from 2022 to 2023 and represents 71.7% of the total AUM.

However, the most notable growth in AUM was performed by crypto funds related to Solana’s prices. The AUM of these investment vehicles started 2023 at the $27 million mark and is closing the year at $747 million, with a 2,665% increased yearly rise.

BTC-Newswire

BTC-Newswire

Bitcoin leads charge as crypto fund AUMs double to $52 billion

Bitcoin leads charge as crypto fund AUMs double to $52 billion

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