2023 has marked a significant uptick in the world of cryptocurrency exchange-traded products (ETPs), according to a report by digital asset platform Fineqia. This surge has notably outpaced the growth of the underlying digital assets themselves.
Crypto-based ETPs, issued by companies such as 21Shares, Grayscale, and CoinShares, witnessed a staggering 91% increase in total assets under management (AUM) from January 1 to October 31, 2023. This growth in crypto ETPs exceeded the advancement of the actual cryptocurrencies, which reported a slower increase of about 70% over the same period.
The ETPs' performance reflects an intriguing trend in the crypto market, highlighting investor interest and confidence in these products.
Bitcoin Dominates the Crypto ETP Landscape
The report from Fineqia revealed that Bitcoin played a pivotal role in this ETP surge.
Bitcoin accounted for a significant 75% of the total crypto ETP AUM, underscoring its dominance in this investment vehicle. This percentage starkly contrasts with Bitcoin’s share of the overall crypto market, which has hovered around 50% for the past year, according to CoinGecko data.
Furthermore, Bitcoin emerged as one of the top performers in the crypto market, experiencing a 104% surge from January to the end of October 2023. In comparison, Ether, the second-largest cryptocurrency by market cap, saw a 50% increase over the same period.
Fineqia’s research analyst, Matteo Greco, explained that the data for the study was meticulously compiled from official sources and, when unavailable, from data aggregators. The findings are updated monthly and provide a comprehensive view of the crypto ETP landscape.
Fineqia CEO Bundeep Singh Rangar interpreted these market dynamics as a precursor to the highly anticipated approval of a spot Bitcoin exchange-traded fund (ETF) in the United States. "The smoke signals are out for the very likely and near imminent approval of Bitcoin Spot ETFs.
The market’s simply responding to this positive signaling,” Rangar stated. This trend in the crypto ETP market suggests a growing sophistication and diversification in crypto investments, reflecting broader acceptance and institutional interest in digital assets.
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