Digital Assets Soar to $67 Billion, Avalanche (AVAL), Polygon (MATIC) and Chainlink (LINK) Gain Momentum

Digital asset investment products saw record-breaking inflows last week, totaling $2.45 billion according to the latest report from CoinShares Research. This massive influx, coupled with recent price increases, has pushed total assets under management (AuM) to $67 billion - the highest level since December 2021.

The United States accounted for 99% of total inflows at $2.4 billion. This represents a major acceleration of net inflows, widely distributed among various providers, signaling surging interest in spot-based ETFs. Meanwhile, outflows from incumbent players have dramatically decreased.

Bitcoin dominated inflows, taking in over 99% of the total. Some investors did take the opportunity to add to short bitcoin positions, which saw inflows of $5.8 million. Ethereum also benefited, seeing inflows of $21 million. Recent downtime impacted Solana, which saw outflows of $1.6 million.

Other major beneficiaries included Avalanche, Chainlink and Polygon, which saw inflows of $1 million, $0.9 million, and $0.9 million respectively. All three have consistently attracted weekly inflows so far this year.

However, investors in blockchain equity ETFs took profits, registering outflows of $167 million. This could indicate concerns over high valuations in the sector.

"The record inflows are an extremely positive sign for the digital asset industry," said Brian Jones, CoinDesk Markets analyst. "As adoption increases, more institutional investors are clearly gaining comfort with crypto assets. The market is rewarding their vote of confidence."

Regions outside the US saw modest activity. Germany and Switzerland posted inflows of $13 million and $1 million respectively. Sweden was the outlier, recording outflows of $26 million.

Overall, industry observers seem optimistic that momentum will continue to build behind digital asset funds. As the asset class matures and regulatory guidance emerges, mainstream adoption is expected to accelerate.

"There's still tremendous growth potential given the small share of total global assets invested in crypto so far," Jones noted. "If current trends persist, we could easily see the $100 billion AuM milestone reached in 2022."

For now, digital asset funds appear poised to continue climbing to new highs, fueled by mounting institutional demand. But as always with such a volatile sector, investors should be prepared for pullbacks along the way.