Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, still the digital currency of choice for investors, according to a new report.
Bitcoin inflows accounted for 97% of total cryptocurrency inflows in 2021According to a report by the digital asset investment firm Jan. 25 CoinShares.
Bitcoin comprises 83% of investment products in managed digital assetswhile BTC investment products only make up 6.5% of total Bitcoin trading volume. Amid a major boom in cryptocurrencies in January, the daily trading volume of BTC has so far increased tremendously this year. Increased from an average of $ 2.2 billion in 2020 to $ 12.3 billion this year.
According to CoinShares, Crypto investment product inflows hit a record $ 1.3 billion in the past week after minor exits. “We believe investors have been very price-conscious this year because of the speed at which prices in Bitcoin hit new highs.”the company added.
Ether (ETH), the second largest cryptocurrency by market capitalization, recorded inflows of $ 34 million last weekaccording to data from CoinShares. There have been “small entries since early December” as investors were cautiousthe report noted.
Both Bitcoin and Ether hit their new highs in 2021. Bitcoin hit its all-time high of $ 42,000 on Jan. 8, followed by Ether’s all-time high of $ 1,430 on Jan. 19. Both cryptocurrencies underwent a significant price correction, with Bitcoin falling below $ 30,000 and Ether to around $ 1,000 on Jan. 21.
According to CoinShares The recent drop in prices was partly due to recent comments from US Treasury Secretary Janet Yellen. On January 19, Yellen raised concerns about cryptocurrencies, adding that cryptocurrencies are widely used for illegal funding. However, noted that cryptocurrencies have some potential to improve the financial system.