Cash flows into cryptocurrency investment products will grow 170% in 2023 to reach $2.2 billion

[ad_1]

Data shared by CoinShares research director James Butterfill shows that transaction volume on social media platforms increased by 170% in 2023, from $816 million to $2.2 billion.

This reflects the resurgence of the growing cryptocurrency industry, driven by significant price gains for cryptocurrencies such as Solana and Bitcoin. This increase is mainly due to expectations that the United States may approve a Bitcoin spot exchange-traded fund (ETF).

Bitcoin dominates market flows

Bitcoin-related assets dominated the market last year, accounting for more than 86%, or $1.9 billion, of recorded inflows. Compared to 2022’s inflow of only $388 million, this is a massive increase of nearly 400%. But it’s worth noting that the figure is still 74% below its 2021 peak of $7.2 billion.

Market watchers attributed the increase in inflows to expectations that a U.S. spot Bitcoin ETF will be launched later this week.

Funds flow into cryptocurrency-related products | Source: CoinShares

Solana became one of the most popular assets among investors last year, with total inflows of $167 million. During this period, Solana’s SOL price increased by more than 850% from less than $10 to over $100 as it attracted new users and formed strategic alliances with well-known global financial companies such as Visa and Shopify.

Ethereum investment products, on the other hand, saw less than $100 million in inflows last year and were arguably the “least popular altcoin” for weeks on end. Despite the launch of several futures-based ETFs in October, Ethereum hasn’t received much attention.

At the same time, widespread bullish sentiment has led some investors to take a bearish stance on the market, with inflows into Bitcoin short products reaching $60 million last year.