Global crypto funds see lowest trading volumes in two years

Crypto funds are generally preferred by institutional investors to take exposure to virtual digital assets.

Trading volume in October saw a continuation of the downward trend observed since November 2021, except for a small increase of 0.39% in May. It is the second month since September 2020 that average daily volumes have fallen below $100 million.

Almost all of the crypto products covered in the report recorded a large decline in average daily volumes, from 24.3% to 77.5% in October.

This paints a bleak picture for crypto-based institutional products, as the macroeconomic climate remains highly uncertain, CryptoCompare said.

Interestingly, exchange-traded funds (ETFs) from Canada-based Purpose Investments Inc saw an increase in trading volume with the Purpose Bitcoin ETF (BTCC) and Ether ETF (ETHH) increasing by 298% and 172% respectively.

Crypto markets rebounded in October on hopes of a less aggressive stance from the Federal Reserve after two straight months of decline, with Bitcoin (BTC) and Ethereum (ETH) rising 3.38% and 9.90% respectively (as of 25 . October).

This is also reflected in digital asset products with assets under management of Bitcoin and Ethereum based products which rose 2.55% and 3.35% respectively.

Bitcoin-based products had mixed results over the past 30 days, with returns ranging from -4.7% to 2.7%. This contrasts with Ether products, which returned -22.1% to 0.8%, despite ETH/USD returning 9.91%.

Institutional preference for bitcoin-based products in October is also shown through average weekly flows by asset class. BTC products experienced weekly inflows of $8.37 million, while ETH products experienced outflows of $5.03 million. This may be caused by the uncertainty surrounding the macroeconomic climate, as investors want to invest in safer crypto-based products.

In October, total AUM for all digital asset investment products rose 1.76% to $22.9 billion (as of October 25). This is the first increase in AUM since July this year, but AUM is still significantly lower than that seen at the market’s peak in March.

This month, AUM for Bitcoin-based digital asset products increased 2.55% to $16 billion, increasing its market share to 69.6%. Meanwhile, AUM for Ethereum-based digital asset products rose 3.35% to $5.68 billion, now accounting for 24.8% of total AUM. AUM for other crypto and basket-based products fell 8.62% and rose 1.12% to $942 million and $346 million, respectively.

Grayscale products continued to represent the vast majority of AUM at $17 billion (74.1% of total), followed by XBT Provider at $1.30 billion (5.66% of total) and 21Shares at $931 million (2.77 % of total).