Weekly inflows to crypto asset management products were strong for the second week in a row, with CoinShares reporting $125 million inflows to the industry last week. According to the European Asset Manager, the total inflow of funds into such products over the past two weeks was $334 million. Bitcoin investment products accounted for the vast majority of inflows, with over 98% of the funds pegged to the largest cryptocurrency by market cap.
According to data provided by the US Commodity Futures Trading Commission, the number of holders who maintain a futures position of at least 25 bitcoins increased from a recent low of 94 in the week of May 30 to 121 in the week of June 27. This is only a small part of the peak of 122 reached at the end of March. The rise in the CME market was bolstered by a broader rally in the cryptocurrency that began after asset manager BlackRock filed for a Bitcoin-traded fund on June 15. Meanwhile, short bitcoin investment products posted a $0.9 million outflow.
The last two weeks of inflows have marked a rapid turnaround in the sector, which saw outflows for several weeks until mid-June. This shift was bolstered by a broader market rally that began following a flood of applications for new spot-traded funds currently awaiting review by the US Securities and Exchange Commission. Despite the increase in the amount of funds, according to data provided by the cryptocurrency data provider RootData, there has been a decrease in the propensity of venture capitals to invest in cryptocurrency projects. Over the past year, venture investments in cryptocurrency companies have dropped sharply, by 70%. Last June, venture capital investments totaled $1.81 billion in 149 rounds. The month of September the previous year was a record month with nearly $2 billion in venture capital investment. However, when compared to the same period this year, venture capital investments totaled only $520 million across 83 projects. Litigation and bankruptcy issues in the crypto market are affecting venture capital investments, but potential projects such as Arbitrum, Aptos and Optimism continue to fuel risk appetite.