Crypto Investment Funds Reach Record $167B AUM as Capital Rotates Out of Traditional Markets

The total amount of assets managed in vehicles that invest in cryptocurrencies has hit a remarkable new zenith, vaulting to an unprecedented $167 billion just this past May. This mountain of managed assets is, in turn, built atop a flurry of fresh investment—more than $7 billion in net new inflows—wondering where this fresh money’s coming from? Crypto funds hit all-time high AUM at $167B Total assets in crypto investment funds soared to an all-time high of $167B in May, fueled by over $7B in net inflows for the month. This surge notably contrasts with outflows from traditional assets, as global equity funds shed… pic.twitter.com/i7CNiiJLMi — CryptoRank.io (@CryptoRank_io) June 10, 2025 The surge of fresh capital into digital assets sharply contrasts with what is happening in traditional financial markets. Equity and gold funds, once the go-to destinations for safe, capital-preserving investments, endured sizable withdrawals when the latest wave of crypto enthusiasm hit. In March 2021 alone, global equity funds shed $5.9 billion, while gold funds saw their first monthly outflows in over a year. Capital Rotation Highlights Shifting Risk Appetite The traditional markets and the crypto world seem to be parting ways. Investor sentiment appears to be shifting. The market has not seen this kind of divergence in some time. If over the past year and a half, the crypto world had been hanging out with the traditional investment world, right now, it’s as if the traditional investment world and the crypto world are on two very different holiday paths. They part company as they head for the celestial shores of diverging investment types. Inflows into gold seem to be leveling off, while investable cryptocurrencies have begun to see fresh waves of inflows. Stocks took a hit in May, shedding almost $6 billion in new net assets. Several market indices are still close to all-time highs, which implies that the sell-off is not necessarily the result of a stampede toward the exit. Indeed, some investors may be using this moment to rebalance into new plays in the crypto space. The increase in crypto fund AUM is a not only a sign of renewed interest in the sector but also a testament to the maturity of the industry’s infrastructure. That is allows for the safe, long-term storage of digital assets seems to be increasingly taken for granted by institutional investors, who now also have access to spot ETFs as another potential way to gain exposure to Bitcoin. These regulated products, whose structure and terms are clear to all involved, make the addition of digital assets to a fund’s portfolio much less of a leap into the unknown. Ethereum Takes the Lead in Derivatives Market Activity The crypto derivatives market has also witnessed a shift—not just the crypto spot market. By far, the most striking detail is that Ethereum (ETH) recently surpassed Bitcoin (BTC) in total contract trading volume across all platforms—an unfathomable concept just a couple of years ago. In the past 24 hours alone, ETH contracts accounted for over $111 billion in trading volume, far exceeding Bitcoin’s $87.5 billion in contract trades. This is an important evolution for the crypto world since both the spot and the derivatives markets have always been dominated by Bitcoin. Meanwhile, the surge in derivatives volume for Ethereum may also be reflecting a growing interest in actually using ETH, particularly in the increasingly popular decentralized finance (DeFi) protocols, liquid staking, and in layer-2 solutions that are being built on top of Ethereum. According to Coinglass, over the past 24 hours, the total trading volume of ETH contracts across the network exceeded $111 billion, surpassing the BTC contract trading volume of $87.5 billion, making ETH the asset with the highest contract trading volume. Additionally, the ETH… — Wu Blockchain (@WuBlockchain) June 11, 2025 Ethereum not only witnessed a rise in trading activity, but it also took the lead in terms of liquidations. Over the same 24-hour period, the volume of liquidations for ETH hit $131 million—more than double that of Bitcoin. This spike could have been due to a number of factors: perhaps ETH traders have the higher leverage demanded by today’s trading atmosphere; maybe Ethereum’s liquid superhighway was more prone to price changes than other coins; or was Ethereum just the choice of platform for those unlucky enough to have hit the wrong side of trade? Crypto Market Sentiment Turns Bullish as Institutional Demand Grows The inflow into crypto funds is rising at an astounding pace. This is not only a base effect owing to the dramatic crypto price increase in the first half of the year but also a sign of the growing interest of institutional players in the digital asset space. Management at crypto funds now claims to have $167 billion worth of crypto in custody, which puts these funds light-years ahead of the previous peak in custody of digital assets. Capital is being rotated out of gold and equities and into cryptocurrencies, indicating that investors are allocating to the asset class in a manner similar to how they would allocate to other strategic, forward-looking opportunities. This “institutional embrace of Ethereum,” as one partner at a major crypto investor puts it, has less to do with the price of ETH and more to do with the anticipated increases in trading activity, network transactions, and overall volatility that Ethereum’s platform will offer in the coming months. While the traditional markets seem almost stagnant, crypto is still managing to show new life by bringing in unprecedented levels of returns and capital formation. As one would expect, this nascent crypto confidence is leading some market participants to muse about a new bull phase for digital assets. At this point, we can hardly overstate the nascent bull phase that seems to be establishing itself for digital assets. With Bitcoin recently surging back over $30,000, market participants are evidently not at all afraid of the recent regulatory crackdown on crypto market makers. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news !

Source: NullTx