Crypto ETP volumes surge 91%, outpacing underlying assets: Report

Global cryptocurrency exchange-traded products (ETP) have seen a significant uptick in 2023, reportedly outpacing the growth of underlying assets, according to a report by the digital asset platform Fineqia, seen by Cointelegraph.

Crypto-based ETPs issued by companies like 21Shares, Grayscale and CoinShares recorded a 91% increase in total assets under management (AUM) from Jan. 1 to Oct. 31, 2023, Fineqia reported.

The surge of crypto ETPs has outperformed the growth of underlying digital assets by 30%, as cryptocurrencies had comparatively slower growth of around 70% over the same period.

Fineqia’s study included all currently issued a total of 168 crypto ETPs, based on the ETP AUM data from sources like 21Shares, Grayscale Investment, VanEck Associates and others.

“The research includes all the products issued by 21Shares, Grayscale, CoinShares, ETC Group, VanEck, WisdomTree and other issuers,” a spokesperson for Fineqia told Cointelegraph.

“The data is updated every first business day of the month; hence, they express the data at the end of the previous month,” Fineqia’s research analyst Matteo Greco stated. He added that the data is collected from official sources and, when not available on the issuers’ websites, from data aggregators. “All the data is stored into a spreadsheet and stacked every month starting from August 2022,” the analyst noted.

Fineqia has attributed the difference between the crypto ETP AUM surge and the crypto market surge to Bitcoin’s (BTC $37,159) larger proportion within digital asset ETPs compared with its share in the overall market. According to the study, Bitcoin accounts for 75% of the total crypto ETP AUM. On the other hand, Bitcoin’s share of the crypto market has been around 50% for the past year, according to data from CoinGecko.

At the same time, Bitcoin has been one of the biggest gainers on the crypto market, surging 104% during a period from Jan. 1 to Oct. 31, 2023. Ether (ETH $2,024), the second-largest cryptocurrency by market cap, surged 50% over the same period, according to data from CoinGecko.

Bitcoin price chart from Jan. 1 to Oct. 31, 2023. Source: CoinGecko

According to Fineqia, the crypto ETP AUM hit $38 billion in October, surging 25% month-over-month and hitting its highest figure since May 2022. The total cryptocurrency market capitalization also rose 17% in October, surging from $1.15 trillion to $1.35 trillion.

According to Fineqia CEO Bundeep Singh Rangar, the dynamics in the crypto ETP market and overall crypto markets signal the excitement around a potentially coming spot Bitcoin exchange-traded fund (ETF) in the United States. He said:

“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.”

The news comes as 12 spot Bitcoin ETF applications from firms like 21Shares and WisdomTree await a decision by the U.S. Securities and Exchange Commission (SEC). In mid-November, the SEC delayed decisions on approvals for another three spot Bitcoin ETF applications by companies like Franklin Templeton, Hashdex and Global X.

On Nov. 15, Franklin Templeton and Hashdex, which had deadlines previously set for Nov. 17, were delayed by the SEC to Jan. 1, 2024. Global X, with a deadline scheduled for Nov. 21, also faced a delay as expected, with the SEC asking the firm to submit a rebuttal in the next 35 days or by Dec. 22.