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Crypto ETPs Up In 2022 – But Total AUM Declines Steeply

According to a new report from Fineqia International, the total number of crypto ETPs grew last year but the value of their Assets Under Management mirrored the overall drop in cryptocurrency prices

New analysis from Fineqia International of Exchange Traded Products (ETPs) with cryptocurrencies as their underlying assets, shows that while the total number of crypto ETPs increased 50% to 162 from 109 in 2022, the value of their Assets Under Management (AUM) fell 66% – a number that correlates closely with the 64% fall in the overall cryptocurrency market value over the same period.

Total crypto ETP AUM declined during 2022 from $58.5 billion to $20 billion – approximately a third of their value. During the same period, the Bitcoin price dropped by 65%, while Ethereum decreased by 68%. For the month of December the AUM of ETPs decreased by 5%, while the value of the cryptocurrency market dropped 8% to about $800 billion. That implied a total decline of 64% in 2022 from $2.2 trillion last January.

"The fact that an average of one new ETP was issued each week, despite the bear market in 2022, can be seen as an indication of continued investor appetite for this asset class," said Fineqia’s CEO Bundeep Singh Rangar. "Specific events, such as the bankruptcy of FTX, contributed to a fall in crypto prices and resultant AUMs."

Timing Is Important

ETPs that launched during bear markets experienced significant growth in subsequent bull markets. Grayscale’s Litecoin Trust (LTCN) launched in 2018, for example, grew more than 220x from an initial AUM of approximately $472k to about $104 million. Similarly, the AUM of two 21 Shares ETPs increased about 120x from the time of their launch in 2019. The 21Shares Ethereum ETP (AETH) grew from about $1.3 million to $155 million and the 21Shares Bitcoin ETP (ABTC) increased from $1.2 million to nearly $145 million.

By contrast, ETPs launched around the time of BTC’s all-time high of more than $65,000 in November 2021, such as the ProShares Bitcoin Strategy ETF, launched on October 18th, 2021, dropped 54% to about $549 million from $1.2 billion. Similarly, the Invesco Physical Bitcoin ETN that started on November 22nd, 2021, fell 70% to about $52 million from an initial $171 million.

In the month of December, the AUM ETPs holding BTC dropped by 3% to $13.5 billion from $14 billion. The AUM of ETH-denominated ETPs decreased by 7.5% to $5 billion from $5.3 billion. ETPs representing alternative coins decreased by 18% and those with a basket of cryptocurrencies dropped by 8%. One ETP that had the FTX token (FTT) as its underlying asset was removed from trading, decreasing the total number of ETPs by one to 162, from the 163 previously listed.


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