According to CryptoPotato, digital asset investment products experienced inflows of $2.25 billion throughout 2023, making it the third-best year based on data dating back to 2017. The inflows for 2023 were 2.7 times higher than those observed in 2022, marking a substantial rebound for the asset class. The majority of this recovery occurred in the final quarter, coinciding with increasing indications that the SEC was becoming more receptive to the introduction of spot-based Bitcoin ETFs in the United States. Total assets under management (AuM) experienced a 129% increase over the year, concluding at $51 billion, the highest level since March 2022.
Bitcoin dominated the inflows, attracting $1.9 billion, representing 87% of total flows, the highest in recorded history. CoinShares revealed that there is no apparent discernible trend in these figures, and the most probable explanation is the excitement surrounding the potential approval of a spot Bitcoin ETF. Some investors directed $60 million towards short positions in Bitcoin, anticipating a potential decline in its price. Ethereum experienced a recovery in inflows, reaching $78 million by the end of the year, but it remains a laggard compared to the total AuM, representing only 0.7%. Solana received inflows totaling $167 million, equivalent to 20% of AuM, while XRP and Cardano garnered inflows of $18 million and $14 million, respectively, representing nearly 24% and 20% of their AuMs. Polkadot and Litecoin registered annual inflows of $6 million and $3 million, constituting 16% and 2% of their AuMs, respectively.
Geographically, the United States experienced the highest inflows, totaling $792 million, yet this only accounted for 2% of the assets under management (AuM). In contrast, Germany recorded the most substantial inflows at 22% of AuM, with Canada and Switzerland following closely at 15% and 13%, respectively. CoinShares asserted that the US lagging is possibly reasonable, considering the potential investor preference for a spot-based ETF.
