The global market for cryptocurrency exchange-traded products (ETPs) has experienced remarkable growth in 2023, outstripping the expansion of the underlying digital assets themselves. According to a report by digital asset platform Fineqia, which was reviewed by Cointelegraph, there has been a 91% increase in the total assets under management (AUM) for crypto-based ETPs from January 1 to October 31, 2023. This growth rate surpasses the approximately 70% increase in the value of the underlying cryptocurrencies during the same period.
The study by Fineqia took into account 168 crypto ETPs currently issued by various companies, including 21Shares, Grayscale Investment, VanEck Associates, and others. The data, updated monthly, is gathered from official sources and data aggregators, providing a comprehensive overview of the market.
One key factor contributing to the disparity between the growth of crypto ETP AUM and the broader crypto market is Bitcoin’s dominant position within digital asset ETPs. Bitcoin constitutes about 75% of the total crypto ETP AUM, whereas its share in the overall crypto market hovers around 50%. During the period from January 1 to October 31, 2023, Bitcoin saw a significant surge of 104%, while Ether, the second-largest cryptocurrency, increased by 50%.
As of October 2023, the crypto ETP AUM reached a high of $38 billion, marking a 25% month-over-month increase and the highest level since May 2022. Concurrently, the total cryptocurrency market capitalization also rose by 17%, climbing from $1.15 trillion to $1.35 trillion.
Fineqia CEO Bundeep Singh Rangar interprets these market dynamics as indicative of the growing anticipation for the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the United States. This sentiment is reflected in the market’s response to positive signals regarding the likelihood of such an approval.
Currently, there are 12 spot Bitcoin ETF applications from firms like 21Shares and WisdomTree pending a decision by the U.S. Securities and Exchange Commission (SEC). In mid-November, the SEC postponed decisions on three spot Bitcoin ETF applications from companies such as Franklin Templeton, Hashdex, and Global X, extending the deadlines into early 2024 and asking for additional rebuttals. This ongoing regulatory process continues to be a focal point for market participants eagerly awaiting the SEC’s final decisions.
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