Crypto Fund Assets Hit Record in May as Investors Seek Hedging and Diversification Amid Market Shifts
Assets managed by cryptocurrency investment funds climbed to a new all-time high in May, fueled by improving global sentiment and a growing trend among investors to use digital assets as a hedge against volatility and a way to diversify away from U.S.-centric investments.
According to Morningstar data covering 294 crypto funds, net inflows totaled $7.05 billion last month—the largest since December—pushing total assets under management to a record $167 billion.
Nicolas Lin, CEO of fintech company Aether Holdings, noted that bitcoin is reasserting itself, not only as a speculative asset but increasingly as a strategic hedge. “Bitcoin is starting to be viewed less as just a high-risk asset and more as a tool for managing portfolio exposure,” he said.
Bitcoin has surged over 15% in the past three months, far outpacing the MSCI World Index’s 3.6% gain and even outperforming gold’s 13.3% rise.
Nic Puckrin, analyst and founder of Coin Bureau, pointed to waning investor confidence in traditional U.S. assets as a key factor driving demand for bitcoin. “The U.S. dollar is expected to continue weakening, bond yields are climbing, and there’s uncertainty hanging over the stock market. But bitcoin is holding its ground,” he explained.
Institutional investment has also played a significant role in crypto’s momentum, particularly following U.S. regulatory approval of spot bitcoin and ether ETFs, which has opened the door to broader participation.
In contrast to crypto’s inflows, Lipper data shows global equity funds saw $5.9 billion in outflows in May, while gold funds experienced their first net outflow in 15 months, losing $678 million. The numbers suggest a growing shift in asset allocation strategies.
Lin believes the surge in crypto inflows will continue, though at a more measured pace compared to the spike seen after ETF approvals. “That first surge acted like a pressure release. What we’re seeing now is more fundamental—crypto establishing itself as a long-term component in diversified portfolios,” he said.
CoinShares data further showed that bitcoin-focused funds drew $5.5 billion in net inflows in May, while ether funds saw $890 million in new investments.
