Global Crypto Based Exchange Traded Products AUM Drop on Aug. Monthly and YTD Basis

Rhea-AI Summary

Fineqia International Inc. disclosed an 11% drop in the Assets Under Management (AUM) of Global Exchange Traded Products (ETPs) with cryptocurrencies as underlying assets from Aug. 1 to Sept. 1, 2022, decreasing from $28.5 billion to $25.4 billion. Bitcoin ETPs are down 12% to $16.7 billion, correlating with a 13% decline in Bitcoin's price. Ethereum ETPs dropped 8%, despite a smaller drop in ETH price. The total AUM for crypto ETPs plummeted 57% YTD, despite the introduction of 46 new products in 2022, indicating a challenging market influenced by rising interest rates and economic factors.

Positive

• 46 new ETPs launched in 2022, indicating ongoing market interest.
• Continued investments in blockchain technology firms despite market downturn.

Negative

• AUM of crypto ETPs fell 57% YTD.
• Bitcoin ETPs decreased 12% alongside a 13% drop in BTC price.
• Ethereum ETPs saw an 8% decline, correlating with market hesitancy.

LONDON, Oct. 4, 2022 /PRNewswire/ - Fineqia International Inc.'s (the "Company" or "Fineqia") (CSE: FNQ) (OTC: FNQQF) (Frankfurt: FNQA) analysis of Global Exchange Traded Products (ETPs) that have cryptocurrencies as underlying assets, revealed a drop of 11% during the month of Aug. in the value of their Assets Under Management (AUM).

Total AUM declined to $25.4 billion from $28.5 billion between Aug. 1 and Sept. 1. The data from 155 listed ETPs, including Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs), was compiled by Fineqia Research.

ETPs holding Bitcoin (BTC) declined 12% to $16.7 billion from $19 billion in the same period. That closely correlated with the 13% slide in the BTC price, which dropped to about $20,000 on Sept. 1 compared with $23,000 a month earlier. ETPs representing alternative coins, or a basket of cryptocurrencies, dropped 12% and 13% respectively.

Ethereum (ETH) denominated ETPs dropped two times more than the underlying ETH price during this period, as the cryptocurrency's price was held up by investor confidence in the ETH network's move on Sept. 15 to a Proof of Stake (PoS) consensus mechanism from a more power consumptive Proof of Work (PoW) one. Ethereum ETPs total AUM dropped 8% to $6.7 billion from $7.3 billion, while ETH itself declined only 2.6% in August.

"There are red and green signals in the crypto markets, a short-term nervousness, and a long-term confidence. Despite a decline in capital inflows into traded crypto products, the actual number and variety of products being introduced in the market is still on the rise," said Bundeep Singh Rangar, CEO of Fineqia. "Investments in private blockchain technology companies have continued in this down market."

Blackrock Inc. recently invested in Coinbase Global Inc. and Barclays Plc invested in Copper Technologies, according to Bloomberg News and Sky News. So far in 2022, 46 new ETPs were released with a variety of cryptocurrency assets. Only four of these held BTC or ETH as underlying collateral as issuers looked to diversify their offerings.

On a Year to Date (YTD) basis, the value of crypto asset denominated ETPs declined greater than the broader cryptocurrency market so far in 2022. While total AUM decreased 57%, similar to a 55% drop in the broader crypto market, this was despite a 42% increase in the number of ETPs.

At the start of 2022, the AUM of crypto ETPs totaled $58.5 billion, with 109 ETPs listed. By Sept. 1, listed ETPs grew to 155, while their value dropped to $25.2 billion. On Sept. 1, the total cryptocurrency market cap was below $1 trillion, compared with $2.2 trillion in Jan.

The raising of interest rates by central banks worldwide to combat inflation caused by the economic effects of the Covid-19 pandemic and the surge in energy prices, have reduced demand for crypto currencies and other assets supported by cryptocurrencies.

All references to dollars are to US dollars.

All cryptocurrency prices are sourced from CoinMarketCap.

All ETFs and ETPs AUM were compiled from publicly available sources, such as 21Shares AG, Grayscale Investment LLC, VanEck Associates Corp., MorningStars, Inc., and TrackInSight SAS by Fineqia's in house Research Department.

https://www.weforum.org/agenda/2022/08/central-banks-hike-interest-rates-inflation-pressures/

https://news.bloomberglaw.com/banking-law/blackrock-teams-up-with-coinbase-in-crypto-market-expansion-1 

https://news.sky.com/story/barclays-snaps-up-stake-in-2bn-cryptocurrency-firm-copper-12658295#:~:text=Copper%2C%20which%20is%20advised%20by,UK%20lender%2C%20Sky%20News%20learns.

About Fineqia International Inc.

Fineqia is a listed entity in the Canada (CSE: FNQ), US (OTC: FNQQF) and Europe (Frankfurt: FNQA). Fineqia's strategic focus has been to provide a platform and associated services to support securities issuances and manage administration of debt securities. Fineqia is currently building out its alternative finance business and it currently holds a growing portfolio of blockchain, fintech and cryptocurrency technology companies worldwide.

For more information, visit www.fineqia.com 

FORWARD-LOOKING STATEMENTS

Some statements in this release may contain forward-looking information (as defined under applicable Canadian securities laws) ("forward-looking statements"). All statements, other than of historical fact, that address activities, events or developments that Fineqia (the "Company") believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding potential acquisitions and financings) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words "may", "will", "should", "continue", "expect", "anticipate", "estimate", "believe", "intend", "plan" or "project" or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company's ability to control or predict, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, the failure to obtain sufficient financing, and other risks disclosed in the Company's public disclosure record on file with the relevant securities regulatory authorities. Any forward-looking statement speaks only as of the date on which it is made except as may be required by applicable securities laws. The Company disclaims any intent or obligation to update any forward-looking statement except to the extent required by applicable securities laws.

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SOURCE Fineqia International Inc.

FAQ

What was the percentage drop in crypto ETPs' AUM reported by Fineqia on Oct. 4, 2022?

Fineqia reported an 11% drop in the AUM of crypto ETPs for August 2022.

What decreased from $28.5 billion to $25.4 billion according to Fineqia's report?

The Assets Under Management (AUM) of Global Exchange Traded Products (ETPs) with cryptocurrencies decreased.

How much did Bitcoin ETPs decrease in value during the reported period?

Bitcoin ETPs declined 12% to $16.7 billion between Aug. 1 and Sept. 1, 2022.

What impact did rising interest rates have according to Fineqia's analysis?

Rising interest rates have reduced demand for cryptocurrencies and related assets.

What was the AUM of crypto ETPs at the beginning of 2022?

At the start of 2022, the AUM of crypto ETPs totaled $58.5 billion.