Cryptocurrencies: Fall in Assets | Advise

According to Fineqia, this would be closely linked to the 13% drop in bitcoin, which fell from US$23,000 to US$20,000 in the space of a month.

As for exchange-traded products representing alternative cryptocurrencies or a basket of cryptocurrencies, they fell by 12% and 13% respectively.

ETHEREUM

Ethereum-denominated products, on the other hand, experienced a drop twice as large as that of the underlying Ethereum price. A situation that would be due to the cryptocurrency holding its price after investors showed confidence in the system change of the Ethereum network, which transited in September from a consensus mechanism based on proof of work (PoW). ) — a more power-consuming approach — towards a Proof-of-Stake (PoS) based mechanism.

Total assets under management for these Ethereum-based products fell 8% from US$7.3B to US$6.7B, while the price of the cryptocurrency itself only declined.” than” by 2.6% in August.

CONFLICTING SIGNALS

“Crypto markets are sending both negative and positive signals, which reflects the nervousness they generate in the short term as well as the confidence they inspire in the long term,” says Bundeep Singh Rangar, CEO of Fineqia.

“Despite a decline in capital inflows into cryptocurrency-traded products, the actual number and variety of products entering the market remains on the rise. Private blockchain technology companies have continued to receive investment in this declining market. »

Indeed, Blackrock recently invested in Coinbase Global and Barclays Plc in Copper Technologies, according to Bloomberg News and sky news.

So far in 2022, 46 new exchange-traded products have been released with a variety of cryptocurrency assets. Of these, only four held bitcoin or Ethereum as underlying collateral as issuers sought to diversify their offerings.

While total assets under management fell by 57%—a decrease similar to the 55% drop seen in the cryptocurrency market as a whole—the number of products increased by 42%.

At the start of 2022, the assets under management of the 109 cryptocurrency-based exchange-traded products stood at US$58.5 billion. At 1er September saw a higher number of products, at 155, but the value dropped to US$25.2 billion.

Between January and September 2022, the total cryptocurrency market capitalization more than halved, from US$2.2 trillion to less than US$1 trillion.

Rising interest rates along with soaring energy prices would have reduced demand for cryptocurrencies and other cryptocurrency-backed assets, according to Fineqia.

For its study, Fineqia compiled data for 155 listed products.

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Cryptocurrencies: Fall in Assets | Advise


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