Cryptocurrency funds exceed expectations and reach a new high in asset inflows

Cryptocurrency funds reached an all-time high in May, surpassing previous records.This has happened despite global volatility and changes in US policy. Investors did not diminish their appetite for risk amid trade tensions and used digital currencies to offset market volatility and diversify their investments.  

Cryptocurrencies depend on internet trends and influential people and rely on a decentralised global computer network without the involvement of a central institution. According to Morning Star, data shows that approximately 294 crypto funds attracted net inflows worth $7.05 billion last month, which compared to figures obtained in December shows a record high level of assets of $167 billion.

The CEO of financial technology company Ether Holdings, Nicholas Lane, said that Bitcoin has regained its momentum and repositioned itself as a volatile asset and a tool that offsets risk exposure. He also predicts that flows will remain stronger and more stable than with the expansion of ETFs. Bitcoin has also seen a 15% increase in value in the last quarter, outperforming the MSCI Global II index by 3.6% and gold by 13.3%. Similarly, Coin Peru analyst and founder Nick Bockery told Reuters that Bitcoin's renewed importance is due to a loss of confidence in the US investment market. 

The dollar is expected to continue to decline, bond yields to rise and greater uncertainty to surround the stock market, although Bitcoin will remain firm in its restored position. Specifically, it already benefited from institutional inflows last year following the approval of spot Bitcoin and Ether ETFs in the United States. 

In comparison, equity funds, based on data from Liber, show that they had a net outflow of 5.9 billion dollars in the same month. In addition, gold funds saw their first outflow in 15 months, worth 678 million dollars. According to Coinshares records, Bitcoin funds attracted 5.5 billion dollars and Ethereum funds attracted 890 million dollars in May.

This year, investors are choosing to invest more in cryptocurrencies, according to a survey by strategic consulting firm Strategic, which polled 2,500 investors in the United States, Saudi Arabia, the United Arab Emirates, Germany and Turkey. The investment landscape in 2025 will focus on diversification, risk management and a changing environment that shows attractive growth potential. 

Economists and financial sector experts are analysing whether the current prosperity of cryptocurrencies is nothing more than a speculative bubble, linking it to doubts about their ability to establish stable transactions that do not lead to losses. Cryptocurrencies do not act like stocks, which means they do not have an equivalent value in the form of a company that manages services and products. This makes people more cautious when investing in them. 

At the end of May, the US banking sector held internal discussions on the expansion of cryptocurrencies and the need to regulate them, at least on a preliminary basis. Such support would end the strict restrictions that prohibit many activities involving cryptocurrencies and could facilitate faster growth. However, officials are still reluctant to embrace this expansion and the change in established rules that it would entail. 

This news symbolises the transformation of cryptocurrencies at a time when investment portfolios are more diversified than ever and highlights how the digital financial sector is growing and consolidating its position in the market with greater confidence.