Global Cryptocurrency ETPs See Significant Uptick, Outpacing Underlying Assets

According to a report by digital asset platform Fineqia, global cryptocurrency exchange-traded products (ETPs) have experienced a significant increase in 2023, surpassing the growth of underlying assets. ETPs issued by companies like 21Shares, Grayscale, and CoinShares recorded a 91% increase in total assets under management (AUM) from January 1 to October 31, 2023.

Fineqia’s study included a total of 168 crypto ETPs currently issued by various companies, such as 21Shares, Grayscale Investment, VanEck Associates, and others. The research analyst at Fineqia, Matteo Greco, stated that the data is collected from official sources or data aggregators and is updated at the end of each month.

The surge in crypto ETPs has outperformed the growth of underlying digital assets by 30%, as cryptocurrencies experienced slower growth of around 70% over the same period. Fineqia attributes this difference to Bitcoin’s larger proportion within digital asset ETPs compared to its share in the overall market. Bitcoin accounts for 75% of the total crypto ETP AUM, while its share of the crypto market has been around 50% over the past year.

During the period from January 1 to October 31, 2023, Bitcoin saw a surge of 104% in price, while Ether, the second-largest cryptocurrency by market cap, surged 50%.

In October, the crypto ETP AUM reached $38 billion, a 25% increase from the previous month, and the highest figure since May 2022. The total cryptocurrency market capitalization also rose 17% in October, reaching $1.35 trillion.

Fineqia CEO Bundeep Singh Rangar sees the dynamics in the crypto ETP market as a signal of the excitement around a potential spot Bitcoin exchange-traded fund (ETF) approval in the United States. He believes that the market is responding to positive signaling regarding the approval of Bitcoin Spot ETFs.

Currently, 12 spot Bitcoin ETF applications await a decision by the U.S. Securities and Exchange Commission (SEC). The SEC recently delayed decisions on approvals for three spot Bitcoin ETF applications, and the deadlines for the remaining applications have also been extended.

The surge in cryptocurrency ETPs and the anticipation of spot Bitcoin ETF approvals demonstrate the growing interest and excitement in the cryptocurrency market.