Bitcoin ETF pushes global cryptocurrency ETP AUM to over $80 billion.
As of the end of February, the number of tracked cryptocurrency ETPs reached 180, making it clear that digital assets are no longer peripheral elements of the investment world, but are at the center of evolving global financial dynamics. According to an analysis by Fineqia International Inc., a digital asset and fintech investment service provider, assets under management (AUM) in exchange-traded products (ETPs) collateralized by digital assets reached an all-time high of $80.5 billion. recorded. This is a 186% increase over the $28 billion recorded in February 2023.
This rise is particularly noteworthy because the growth rate of the underlying cryptocurrency assets themselves has nearly doubled, rising 37% from $1.73 trillion in January 2024 to approximately $2.37 trillion in February 2024.
This growth differential highlights the growing appeal of digital assets to traditional financial institutions, especially following the approval and commencement of trading of the Bitcoin (BTC) spot exchange-traded fund (ETF) in the United States on January 11.
These ETFs have been an important factor in driving more capital inflows into digital asset ETPs and boosting AUM by 38%, exceeding its previous high of $58.5 billion by the end of 2021.
Commenting on this trend, Fineqia CEO Bundeep Singh Rangar suggested that traditional fund managers who have overlooked Bitcoin’s impressive returns over the past decade are doing so at their own peril.
Rangar highlighted the legalization of Bitcoin through spot ETFs, the possibility of interest rates easing, and the decline in token supply as key factors that could keep Bitcoin prices rising.
This sentiment is reflected in the rapid uptake of the spot BTC ETF, with 10 new funds including funds from major issuers such as BlackRock, 21Shares, and Grayscale, attracting $7.4 billion in net inflows since inception.
Notably, Grayscale’s Bitcoin ETF (GBTC) leads the way with approximately $26.5 billion in AUM, despite significant outflows prior to its conversion from the trust to the ETF.
BlackRock’s Bitcoin ETF (IBIT) alone amassed $10 billion in AUM in just two months, making it the fastest ETF to reach this milestone.
This is indicative of a larger trend in which spot Bitcoin ETFs are increasingly viewed by investors as “digital gold”, pushing the price of Bitcoin higher, as opposed to the traditional dynamics affecting the price of physical gold.
Institutional competition against Bitcoin, triggered by high demand for ETFs, is having a major impact on the market by absorbing the available BTC supply and consequently driving up the price. This leaves BTC-backed ETPs accounting for approximately 4.9% of total BTC supply, while the 10 newly introduced BTC spot ETFs hold 3.9% of the supply, valued at $48.2 billion.
Additionally, Ethereum (ETH) and other cryptocurrencies have also seen notable increases in valuation and ETP AUM, demonstrating the expanding interest in digital assets beyond Bitcoin. The SEC’s pending decision on the filing of multiple ETH spot ETFs adds another layer of excitement to the market, with its potential impact on the price of Ethereum and its widespread adoption in the institutional investment environment.
As the digital asset market continues to mature, the remarkable growth in ETP AUM not only highlights the growing institutional acceptance of cryptocurrencies, but also signals a paradigm shift in investment strategies for digital assets.
Also Read: Bitwise Bitcoin ETF Reaches $1 Billion AUM in Record Time
