Crypto Investment Products’ AUM Surges as Investor Confidence Returns: CryptoCompare Report

The total assets under management for cryptocurrency investment products has surged by 36.8% in the month of January to $19.7billion, the highest recorded assets under management (AUM) since May 2022, as investors’ confidence returns.

According to CryptoCompare’s latest Digital Asset Management Review report, bullish sentiment on the market was fueled by a short squeeze that forced short sellers to close their positions and a favorable economic outlook, as shown by the latest Consumer Price Index (CPI) report. This led to Bitcoin’s price reaching its highest point since August 2022, at $23,000.

Despite the recent rise, crypto investment products’ AUM remain significantly lower compared to January 2022. This is due to a challenging year for Bitcoin, the broader cryptocurrency market, and traditional assets. Specifically, AUM for Bitcoin and Ethereum products have declined by 38.7% and 39.2%, respectively, compared to January 2022, per the report.

In January, the report adds, the average daily aggregate product volumes across cryptocurrency investment products also rose, with a 30% recovery to $72.5 million. Volumes, however, are still down 84.4% when compared to January 2022, and 95.2% when compared to their all-time high, which was recorded in January 2021.

Nevertheless, January represented the largest weekly net flows recorded since November 2022, with $36.8 million pouring in per week. The increase came as the recent bull market “restored investor confidence in the market and the digital asset investment universe.”

Last month, short Bitcoin-based products had the highest net flows at $12.0 million, followed by Bitcoin-based products with $7.9 million and Ethereum-based products with $4.9 million, according to the report.

Notably, the U.S. Securities and Exchange Commission (SEC) has recently rejected the ARK 21 Shares Bitcoin ETF proposed by ARK Investment and 21Shares for listing on the CBOE BZX Equities Exchange for the second time. The rejection was due to the SEC’s argument that the exchange does not comply with SEC standards for preventing fraud. To date, no Bitcoin ETF based on the spot market has received SEC approval.

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