Crypto Investors Diversify; non-bitcoin, ether funds see influx

Global crypto funds based on assets that fall under the “other” umbrella (representing non-bitcoin and ethereum products) saw the biggest gains for assets under management (AUM), which rose 12.3% to $1.13 billion as of 23. August, data showed.

Multi-asset and other fund categories had positive net flows of $1.3 million and $0.8 million respectively during the first three weeks of August. The report also said that ethereum-based crypto funds led the decline in July and continued to outperform in August. Assets for bitcoin-based products fell 7.16% to $17.4 billion during August, while ethereum-based products rose 2.36% to $6.81 billion.

“Even at a more granular level, no bitcoin products covered in the report saw AUM or volume increases in the month of August. We may see interest move away from bitcoin in the short term, as ethereum-based products keep the spotlight with the much-anticipated ‘merger’ in horizon,” said CryptoCompare.

Ethereum is moving to proof-of-stake for its consensus protocol. Called “the merge,” the software upgrade has been in the works for years, and it will change the way ethereum orders transactions to become more energy efficient.

The reports highlighted that since the end of July 2022, total AUM across all digital asset investment products has fallen 4 to $25.8 billion (as of August 23).

In August, bitcoin’s AUM fell 7.16% to $17.4 billion, and as a result, its market share fell to 67.6% of total AUM, down from 76.9% in July. Ethereum products now account for 26.5% of total AUM, their largest market share since the start of the year.

Furthermore, Grayscale products continued to represent the vast majority of AUM at $19.0 billion (73.7% of total) followed by XBT Provider at $1.49 billion (5.78% of total) and 21Shares at 1.04 billion dollars (4.04% of total).

Grayscale products are preferred by global institutional investors. Additionally, AUM represented by ETFs fell 0.64% to $2.48 billion in August, controlling 11% of the market share.

According to the report, average daily aggregate volumes across all digital asset investment products fell by an average of 1.01% to $131 million from July to August, highlighting weakness in the market.

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