Crypto funds reached a historic milestone in May 2025, with assets under management climbing to a record $167 billion, according to Morningstar data on 294 funds.
The sector saw net inflows of $7.05 billion, the highest since December of the previous year, driven by easing trade tensions and growing investor confidence in digital currencies.
Bitcoin funds led the charge with $5.5 billion in inflows, while ether funds attracted $890 million, per Coinshares data.
This surge reflects a broader trend of cryptocurrencies transitioning from high-risk investments to key components of diversified portfolios.
The rise in crypto fund assets contrasts sharply with other markets, as Lipper data reported $5.9 billion in net outflows from global equity funds and $678 million from gold funds, the latter’s first outflow in 15 months.
Analysts attribute the crypto boom to waning faith in traditional U.S. investments.
“The greenback is projected to keep plummeting, bond yields are rising, there’s uncertainty about the equity markets. But bitcoin seems to be holding strong,” said Nic Puckrin, analyst and founder of Coin Bureau.
Bitcoin’s 15% gain over the past three months outpaced the MSCI World Index’s 3.6% rise and gold’s 13.3% increase, underscoring its appeal as a hedge against volatility.
Institutional inflows, spurred by the U.S. approval of spot bitcoin and ether ETFs, have been a major catalyst.
“Institutional interest in crypto is significantly increasing, driven largely by new products and regulatory clarity,” said Hunter Horsley, CEO of Bitwise.
Aether Holdings’ CEO Nicolas Lin noted, “I think flows will stay strong, but probably more steady than the rush we saw after the ETFs launched.”
As cryptocurrencies cement their role in diversified portfolios, the absence of direct commentary from major crypto fund leaders or regulators suggests a cautious optimism, with potential policy shifts looming as market dynamics evolve.