Crypto funds saw their assets rise to a record $167 billion in May, driven by easing trade tensions that boosted investor confidence. Many investors turned to digital currencies to protect against market ups and downs and to diversify away from U.S. assets.
Data from Morningstar covering 294 crypto funds showed net inflows of $7.05 billion last month, the highest since December. Nicolas Lin, CEO of fintech firm Aether Holdings, noted that bitcoin is gaining recognition not just as a volatile asset but as a tool for hedging risks.
Over the past three months, bitcoin’s price increased by more than 15%, outperforming the MSCI World Index’s 3.6% rise and gold’s 13.3% gain. Analyst Nic Puckrin of Coin Bureau highlighted that concerns over the U.S. economy and a weakening dollar have strengthened bitcoin’s appeal.
Institutional interest has grown, especially after U.S. regulators approved spot bitcoin and ether ETFs. Meanwhile, traditional global equity funds saw $5.9 billion in outflows in May, and gold funds experienced their first outflow in 15 months, signaling a shift in investment strategies.
Lin expects crypto fund inflows to continue steadily, marking the start of digital assets becoming a regular part of diversified portfolios. Coinshares data confirmed bitcoin funds drew $5.5 billion and ether funds $890 million in net inflows during May.
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