Crypto Fund Assets Reach Record High Amid Weakening Demand for U.S. Assets

As global investors reassess their portfolios in the face of softening sentiment toward U.S. assets, cryptocurrency funds have seen a notable surge in capital inflows. In May, total assets under management (AUM) for crypto funds reached an all-time high, supported by improved risk appetite following easing trade tensions. Investors increasingly turned to digital assets both as a hedge against volatility and as a means to diversify away from U.S.-centric holdings.

According to data from 晨星 (Morningstar), which tracks 294 cryptocurrency funds, net inflows into these funds totaled $7.05 billion last month—the highest since December 2023. As a result, overall AUM in the sector climbed to a record $167 billion.

CoinShares data further revealed that Bitcoin-focused funds accounted for $5.5 billion in net inflows during May, while Ethereum-related funds attracted $890 million.

Nicolas Lin, CEO of fintech firm Aether Holdings, commented that Bitcoin is “beginning to reassert its value,” adding that it is now viewed by many investors not only as a high-volatility asset but also as a viable hedging instrument.

Over the past three months, Bitcoin has appreciated by more than 15%, outperforming gold’s 13.3% rise and significantly outpacing the MSCI World Index’s 3.6% gain.

Nic Puckri, founder of crypto analysis platform Coin Bureau, noted that the shift in market sentiment is partly due to waning confidence in U.S. assets. “The dollar is expected to continue declining, bond yields are on the rise, and equity markets remain uncertain. Yet, Bitcoin has demonstrated resilience,” he said.

The regulatory greenlight for spot Bitcoin and Ethereum ETFs in the U.S. over the past year has further accelerated institutional interest, offering a new channel for capital inflows.

In contrast, data from Lipper indicates that global equity funds experienced $5.9 billion in net outflows in May. Meanwhile, gold funds recorded a $678 million outflow—their first in 15 months—signaling a broader, structural realignment in global asset allocation.

Lin emphasized, “While inflows are likely to remain strong, the pace will moderate compared to the surge seen immediately after ETF approvals.” He added, “That initial wave reflected pent-up demand. What we are witnessing now is more meaningful: the steady integration of crypto assets into diversified investment portfolios.”