In 2023, global cryptocurrency exchange-traded products (ETP) have experienced a remarkable surge, surpassing the growth of their underlying assets, as per digital asset platform Fineqia. The analysis by Fineqia International Inc. reveals a substantial 91% increase in total Assets Under Management (AUM) for exchange-traded products with digital assets as collateral, outpacing the growth of the underlying digital assets by 30% in the year-to-date (YTD) period.
Bitcoin Dominance Amplifies Impact On Crypto ETPs
The slower growth of 70% in underlying assets from January 1 to October 31 is attributed to Bitcoin’s dominant share within digital asset ETPs compared to its representation in the overall market. Bitcoin constitutes three-quarters of the ETPs AUM despite being only half of the digital asset market. This year’s significant doubling in Bitcoin’s value has magnified its impact on ETPs AUM, contributing to the observed differential.
The peak value recorded for AUM in October reached $38 billion, reflecting a monthly increase of 25% from $30.5 billion—the highest figure since May 2022. Concurrently, the market value of crypto assets rose 17% to approximately $1.35 trillion from $1.15 trillion, marking the highest market cap since June 2022.
Fineqia CEO Bundeep Singh Rangar notes the positive signals for the likely approval of Bitcoin Spot ETFs, suggesting the market’s response to this optimistic outlook. Twelve pending BTC spot ETF applications with the U.S. Securities and Exchange Commission (SEC) contribute to the anticipation, with investors adjusting their allocations in expectation of potential approvals.
BlackRock’s recent confirmation of plans for a spot ETH ETF further adds to the market dynamics. Bitcoin’s price surged by 28% in October, reaching $34,600 from $27,000 at the end of September. ETPs holding BTC experienced a 29.6% increase in AUM to $28.1 billion. Ethereum (ETH) also saw an 8.2% increase in October, with ETH-denominated ETPs AUM rising to $7.2 billion.
ETPs representing a diversified basket of cryptocurrencies increased by 27% in AUM during October, while those representing an index of alternative coins rose by 26%. Notably, Solana (SOL) played a significant role in the growth of altcoins, with ETPs holding SOL increasing by 172% in AUM during October.
Overall, Fineqia Research’s AUM calculation includes the launch or closure of ETPs and tracked 168 ETPs as of the end of October. All references to price are in USD, and cryptocurrency prices are sourced from reputable platforms such as CoinMarketCap and CoinGecko.
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