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

1 min

The total assets under management for digital currency financing products has surged by 36.8 percent in the 30 days of January to $19.7billion, the highest recorded assets under management (AUM) since May 2022, as investors’ confidence returns.

Reports by CryptoCompare’s latest Digital Investment Management Review report, positive  tendency 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 BTC’s price reaching its highest point since August 2022, at $23,000.

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

Regardless of the past few boost, cryptocurrency financing products’ AUM remain significantly lower compared to January 2022. This is owing to a challenging year for Bitcoin, the broader digital currency market, and traditional assets. In particular, AUM for Bitcoin (BTC) and Ethereum (ETH) products have declined by 38.7 percent and 39.2%, respectively, compared to January 2022, per the report.

In January, the report adds, the average daily aggregate product volumes across digital currency financing products likewise rose, with a 30 percent recovery to $72.5 Million. Volumes, on the other hand, are still down 84.4 percent when compared to January 2022, and 95.2 percent when compared to their record-breaking peak, 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 past few bull market “restored investor confidence in the market and the digital investment financing universe.”

The previous  30 days, 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, reports by the report.

It’s worth noting that, the United States Securities and Exchange Commission (SEC) has recently rejected the ARK 21 Shares Bitcoin (BTC) ETF proposed by ARK Investment and 21Shares to be listed on the CBOE BZX Equities Exchange for the Second time. The rejection was owing to the SEC’s argument that the exchange does not comply with SEC standards for preventing fraud. To date, no Bitcoin (BTC) ETF according to the spot market has received SEC approval.

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