Digital Asset Soars to $67 Billion, Avalanche (AVAL), Polygon (MATIC), and Chainlink (LINK) Gain Momentum.

Digital asset investment products saw record inflows last week, totaling $2.45 billion, according to a recent report from CoinShares Research. These large inflows, along with recent price increases, have pushed total assets under management (AuM) to $67 billion, the highest level since December 2021.

The United States accounted for 99% of the total inflow, at $2.4 billion. This represents a significant acceleration in net inflows that are widely dispersed across a variety of providers and is indicative of a surge in interest in spot-based ETFs. On the other hand, the outflow of current players has decreased sharply.

Bitcoin dominated inflows, accounting for over 99% of total inflows. Some investors took the opportunity to add to their short Bitcoin positions, which brought in $5.8 million. Ethereum also benefited from $21 million in inflows. Recent downtime impacted Solana, resulting in a $1.6 million outflow.

Other major beneficiaries included Avalanche, Chainlink, and Polygon, which recorded inflows of $1 million, $900,000, and $900,000 respectively. All three have consistently attracted weekly inflows so far this year.

However, investors in the blockchain stock ETF benefited, recording $167 million in outflows. This may indicate concerns about the sector’s high valuations.

“Record inflows are a very positive sign for the digital asset industry,” said CoinDesk market analyst Brian Jones. “As adoption increases, more institutional investors are clearly becoming comfortable with crypto assets. The market is rewarding their vote of confidence.”

Outside the United States, activity was minimal. Germany and Switzerland recorded inflows of $13 million and $1 million, respectively. Sweden was an outlier, recording an outflow of $26 million.

Overall, industry observers appear optimistic that the momentum for digital asset funds will continue to build. Mainstream adoption is expected to accelerate as the asset class matures and regulatory guidance emerges.

“Considering the small portion of total global assets invested in cryptocurrencies to date, there is still tremendous growth potential,” Jones said. “If current trends continue, we could easily see AuM reaching $100 billion in 2022.”

Currently, digital asset funds are expected to continue hitting record highs thanks to increased institutional demand. But as is always the case in volatile sectors, investors should be prepared for a downside.

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