Institutional investors poured up to $2.2 billion into crypto goods last week. Cryptocurrency inflows reached $2.2 billion weekly, even after the most recent U.S. election on November 5. This represents a 15% increase, or approximately $1.98 billion, over the prior week’s total.
The digital asset major’s Crypto Growth product inflow has reached $33.5 billion this year, as stated in a press statement dated November 18th. Its under-asset-management (AUM) reached a new record high of $138 billion.
Last week, Bitcoin (BTC) dominated asset-based inflows totaling over $1.48 billion, or 67%. Next came Solana (SOL), with $23.9 million in incoming funds, and Ethereum (ETH), with $646 million. Justin Drake’s proposed update to the Beam Chain network raised Ethereum’s inflow by $157 million. Only Binance Coin (BNB) and multi-asset cryptocurrencies saw a weekly outflow.
Bitcoin will serve as an inflation hedge in 2024
Crypto Growth Given the ongoing economic uncertainty, Bitcoin’s standing as an inflation hedge remains strong in 2024. Central banks worldwide have been printing money to support economies during the pandemic and other stringent monetary policies in recent years, leading to higher inflation rates.
Consequently, more investors are considering Bitcoin as an alternate form of wealth storage. With a maximum supply of 21 million coins, Bitcoin avoids the inflationary risks associated with traditional currencies caused by printing too much money. Institutional investors such as MicroStrategy and Tesla have steadily increased.
Their cryptocurrency holdings are due to Bitcoin’s ability to safeguard capital during rising consumer prices. In 2024, the success of Bitcoin during inflationary times and its growing popularity led everyone to agree that it was considered “digital gold.” Institutional investors hold Bitcoin in high esteem due to its deflationary properties, which are believed to offer long-term protection against inflation despite the cryptocurrency’s volatility.
Crypto product driving factor
According to CoinShares’ head of research, James Butterfill, the combination of looser monetary policy and a Republican gaining a majority in Congress and the presidency appears to be driving these inflows. Still, the cryptocurrency business and Crypto Growth products rallied positively during Donald Trump’s second term in the White House. According to Butterfield, Trump’s presidency will enact crypto-friendly fiscal policies and regulations.
Elon Musk, Robert F. Kennedy Jr., and Tom Emmer are among the crypto celebrities Trump previously appointed to cabinet secretary positions. Cryptocurrency investors felt more secure after Republican Senator Cynthia Lummis introduced the Bitcoin Act and Strategic Reserve. He went on to say that this optimistic view may lead Bitcoin to its greatest future potential.
In Summary
In 2024, the Crypto product sector saw a record $2.2 billion inflow, which signifies a new era of institutional acceptance and engagement. Institutional investors gradually add digital assets to their portfolios with increasing certainty for various reasons, including diversification, inflation protection, and value preservation.
Despite ongoing challenges such as regulatory ambiguity and price volatility, the development of Ethereum and the debut of DeFi promise to present new growth opportunities. A new era is emerging in the cryptocurrency market, where digital assets will undoubtedly increase in significance within the international monetary system as we move into the second half of 2024 and beyond.
FAQs
Which cryptocurrencies saw the most inflows?
Bitcoin led with $1.48 billion in inflows, followed by Ethereum ($646 million) and Solana ($23.9 million).
Why is Bitcoin considered an inflation hedge in 2024?
Bitcoin is seen as a store of value during inflationary times due to its limited supply, contrasting with the inflation risks of traditional currencies.
What political factors are influencing cryptocurrency inflows?
The expected crypto-friendly policies under Donald Trump's second term and Republican leadership are driving positive market sentiment.
What is the overall trend in cryptocurrency investments?
Institutional investors are steadily increasing their cryptocurrency holdings, seeking diversification, inflation protection, and value preservation.
