Institutional Bitcoin Products AUM Hit New High Despite Volume Pullback

Total inflows into bitcoin investment products were $97.5 million between Nov. 8 and Nov. 12, pushing the sector to record assets under management (AUM), according to CoinShares’ Nov. 15 “Weekly Report on Digital Asset Fund Flows.” of $56 billion. Bitcoin’s year-to-date (YTD) inflows also hit $6.5 billion last week.

Bitcoin instruments accounted for 64.6% of the $150.9 million that flowed into digital asset investment products last week. At the same time that Bitcoin’s AUM was hitting a new all-time high, Bitcoin reached an all-time high of around $69,000 on November 10, but the market has since retreated 10% and last traded at $62,100.

While CoinShares pointed out that digital asset investment products have seen inflows for 13 consecutive weeks, the industry will see "low volume" in the second half of 2021.

According to the report, the average daily trading volume in the second half of this year was $750 million, a 22% drop compared to $960 million in the first half of 2021.

While ethereum saw the strongest inflows last week among products tracking altcoins at $17.3 million, the figure marks a 44% week-on-week decline for the asset class. Despite the drying up of transaction volume, CoinShares reported a record AUM of $21 billion for Ethereum products, while the price of ETH hit an all-time high of nearly $4,900 on Nov. 10.

Cardano (ADA) followed closely with $16.4 million inflows, a 227% increase in weekly inflows. CoinShares said it was unable to identify a "clear catalyst" for the surge in inflows into the Cardano fund.

Institutional traders have locked up record amounts of money in bitcoin investment products despite a drop in trading volumes in the second half of 2021.

The price of ADA has also experienced a sharp rebound this week, rising from around $2.00 on November 8 to around $2.36 on November 10. However, the price of Cardano fell back to $2.11 on Friday. ADA is still down 46% from its September all-time high of $3.09.

Solana (SOL), Polkadot (DOT) and Ripple (XRP) investment products also saw inflows last week of $9.8 million, $5.2 million and $3.1 million, respectively.

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