INFLOWS into cryptocurrency funds and products hit a record US$4.5 billion in the first quarter of this year, suggesting increased institutional participation in the once-maligned sector, data from digital currency manager Coinshares showed Tuesday.

The first quarter inflows represented an 11 percent increase from the last three months of 2020, which hit US$3.9 billion.

Investments into crypto, however, slowed in the first quarter compared with the fourth quarter of last year, where growth was 240 percent, data showed. Coinshares said in the report, however, that this was not “indicative of a broader slowing trend, as quarterly growth rates tend to be highly varied.”

On Monday, the cryptocurrency sector hit an all-time peak of US$2 trillion in market capitalization. Bitcoin’s market cap was more than US$1 trillion, holding that milestone level for one whole week.

“There’s so much momentum that’s building and people are scrambling to see where the other coins, aside from Bitcoin, are going,” said Edward Moya, senior market analyst at online FX trading platform OANDA.

Bitcoin had the most inflows in the first quarter with US$3.5 billion, according to the Coinshares data, followed by Ethereum, which posted US$765 million in investments.

The largest cryptocurrency in terms of market cap hit a record high of US$61,781.83 in mid-March, but has since traded in a narrow range as investors consolidated gains.

Crypto assets under management have also surged to a peak of US$59 billion, CoinShares data showed. Last year, assets under management for the sector hit US$37.6 billion.

Grayscale is still the largest digital currency manager, with US$46.1 billion in assets, while CoinShares, the second biggest and the largest European digital asset manager, oversees about US$5.1 billion in assets.

(SD-Agencies)