For the cryptocurrency sector, 2023 was an amazing year, considering the bloodbath that dominated most of 2022.
Investors rushed to digital assets in the face of rising prices and mainstream adoption, and a leading digital asset investment company has something to say about the market's performance during the last year.
James Butterfill, the head of Research at CoinShares, in a recent report, said that in 2023, the total amount invested in cryptocurrency fund products was way more than $816 million by a wide margin, with the cryptocurrency market also recording amazing inflows of $2.2 billion.
According to the report from Butterfill, 86% of the total amount of money that flowed into the crypto market was driven by Bitcoin.
Butterfill's tweet goes further to say that in 2023, nearly $1.9 billion was invested in Bitcoin funds, up from $388 million in 2022.
This demonstrates a growing demand for Bitcoin as the years go by, and as the next Bitcoin halving draws near.
In particular, CoinShares notes that the last week of 2023 saw $243 million in inflows into the crypto market, of which $209 million went to Bitcoin funds.
Interestingly, Bitcoin's price also rallied significantly as the funds rolled in, and eventually breaking beyond the $45,000 mark on 2 January 2, this year.
It is the highest point since November 2021.
Another crypto asset that had notable inflows in 2023 was Solana (SOL).
Solana according to CoinShares, was the second most popular in terms of inflows after Bitcoin in 2023, drawing $167 million in capital.
Solana's remarkable achievements were fueled by its quick expansion and innovations, as well as the launch of several SPL tokens like Pyth, Jito and most popular of all, Bonk.
Solana's performance in 2023 was highly impressive, with the cryptocurrency hitting $124 in late December, despite starting the year under $20.
On the other hand, not every crypto fund saw a rise in inflows in 2023.
Investors particularly showed a preference for more specialized and targeted products, according to the $18 million net withdrawals from multi-asset funds we witnessed last year.
BNB funds also lost about $1 million, leading to a negative balance for the cryptocurrency, in terms of inflows.
A likely reason may have been the endless regulatory hurdles Binance had to scale in 2023, from initially being sued (along with Coinbase) by the SEC, to having to pay billions in fines to the CFTC.
Overall, according to the report, the total assets under management of crypto ETPs now sit at around $56 billion by the end of 2023, indicating a high level of liquidity and activity in the market.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.