The weekly report, from Coinshares Digital Asset Fund Flows, highlighted the increasing popularity of Ether among investors, with inflows of $113 million, representing nearly 50 percent of total flows.
More investors are choosing passive investment strategies over active ones, according to an analysis of investment providers that showed assets under management of $54 billion for passive and $786 million for active.
In another report this month, digital assets under management across exchange-traded products doubled to a record $43.9 billion, according to researcher CryptoCompare.
Bitcoin grew 60 percent already this year, hitting an all-time high of $58,354 in March as big, mainstream companies embraced crypto-currencies, including Tesla and Mastercard.
There are so many examples of this strengthening ecosystem for digital assets.
Also in March, shares in asset manager CoinShares Group started trading on a regulated exchange. The firm had more than $4 billion in assets under management last month. Coinbase, a US crypto exchange founded in 2012, also filed to go public in a direct listing on Nasdaq, with an estimated value of about $100 billion.
This movement toward digital assets is happening fast, including here in Canada. Again in news coming out just this month, Canada’s Purpose Bitcoin ETF became the world’s first exchange-traded fund physically settled in the cryptocurrency, causing asset managers to rush toward the launching of their own bitcoin ETFs.
Digital assets in general and crypto-currencies in particular are swiftly transforming our markets, our laws and perhaps our entire attitude toward commerce.
Governments, as usual, are just now trying to catch up to these changes. In more news that came out, you guessed it, just this month, the US House of Representatives is considering legislation requiring the Commodity Futures Trading Commission and the Securities and Exchange Commission to jointly create and manage a digital asset working group.
The Eliminate Barriers to Innovation Act is asking for the group to promote innovation-pushing collaboration between U.S. regulators and the private sector.
This has huge implications.
The House bill doesn’t explicitly define “digital asset,” which is a very broad term. But the Commodity Futures Trading Commission recently defined it as anything “that can be stored and transmitted electronically, and has associated ownership or use rights.” That could include currencies, securities or commodities.
If you haven’t gotten it by now, let me be clear: Crypto-currencies and other digital assets are here to stay. It’s too early to say whether all this growth will continue at the same pace over the next few years. Markets have always been prone to sudden bursts of enthusiasm or panic, and especially right now, with so many new DIY investors entering the marketplace.
The weight of the evidence suggests this trend is likely to continue for at least the short-term. The term “digital assets” doesn’t just relate to the rise of crypto-currencies. Even the annual work output of a company or individual creates a digital mountain of information that must be catalogued and maintained, resulting in a growing industry dedicated to its organization and management.
After 100 years of storing documents, companies have been moving toward digital asset management systems since the 1990s. There’s the increased efficiency of having all of a company’s files in one place, including photos, videos, documents, branding, etc. And there’s also the increased pressure to protect the environment by avoiding the use of paper or any other physical materials.
We’re even at the point where we are figuring out how to pass on our digital assets when we die. Many social media and other accounts have an “end of life” policy that must be followed for your next of kin to gain access to your accounts after your death.
What’s clear from all this information is that our digital lives have become at least equal in importance to our physical ones — in commerce, socialization and law.
Gaining an understanding of these changes will only be advantageous to both your business and your personal life.