Crypto inflows hit $2.3bn in 2023 — see where the money went

Crypto assets saw $2.3 billion in inflows in 2023, according to a new report.
Bitcoin received the lion’s share of these flows, marking its highest market dominance on record.
Crypto stocks and Solana also performed well last year.

In a clear bullish signal, institutions poured money back into crypto in 2023 after watching the market crater the prior year.

Digital asset investment products saw approximately $2.3 billion of inflows last year, according to a new report from alternative asset manager CoinShares.

Of those flows, 87% — almost $2 billion — went into Bitcoin.

Bitcoin dominance

Bitcoin’s dominance over the rest of the crypto market has never been so high, according to CoinShares’ data dating back to 2017.

Bitcoin’s prior dominance peak, in 2020, saw the top cryptocurrency receive 80% of all flows. Bitcoin rose 155% in the course of 2023.

The surge was driven by the hype surrounding the potential launch of Bitcoin spot exchange-traded funds, the report suggested.

The crypto sector saw consistent inflows from the week of September 25 until the end of the year, with only one week of outflows in that period.

The US were responsible for the largest inflows worldwide to the tune of $792 million.

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These inflows only represented 2% of the $37.8 billion in crypto assets under management by US institutions, including Grayscale and Ark Invest.

Bitcoin ETF

For comparison, Germany, Canada, and Switzerland saw inflows of $663 million, $543 million, and $434 million, respectively.

They only count roughly $3.3 billion in crypto assets under management each — meaning that the percentage of funds moving into digital assets in those countries was higher than in the US.

“The US lagging is perhaps understandable given the likely preference amongst investors for a spot-based ETF,” CoinShares said.

Total inflows were 2.7 times higher in 2023 than in 2022, the report said. It was the third largest yearly influx on record: 2021 saw $10.7 billion in inflows, while 2020 saw $6.6 billion.

Assets under management worldwide stand at $51 billion, the highest since March 2022.

Crypto stocks benefited from the trend, with $458 million in inflows — pushing assets under management up 109%.

Bitcoin mining stocks performed particularly well. Bernstein analysts said in December that “Bitcoin miners remain high-beta Bitcoin stocks.”

Solana was another big winner. It received $167 million in inflows in 2023.

While comparatively small against Bitcoin, Solana’s inflows represent 20% of the total SOL under management. SOL soared roughly 941% in the course of the year, from approximately $9.6 to $101.

A laggard

Ethereum, meanwhile, remained a “laggard”, with only $78 million in inflows — a dismal number for the second largest cryptocurrency by market capitalisation, CoinShares said.

CoinShares said Solana had “benefited from investor reluctance on Ethereum.”

Tom Carreras is a markets correspondent at DL News. Got a tip about crypto flows? Reach out at tcarreras@dlnews.com