Number of Crypto ETPs Grew 50% in 2022, Even as AUM Mirrored Drop in Cryptocurrency Prices

Rhea-AI Summary

Fineqia International Inc. (CSE: FNQ; OTC: FNQQF) reported a 50% increase in the number of Exchange Traded Products (ETPs) linked to cryptocurrencies, rising from 109 in January 2022 to 162 by December 2022. Despite this growth, the Assets Under Management (AUM) plummeted by 66%, from $58.5 billion to $20 billion, paralleling a 64% decline in cryptocurrency market values. December 2022 alone saw a 5% drop in ETP AUM. The report suggests sustained investor interest in ETPs amid bearish market conditions, although significant price falls in Bitcoin and Ethereum (65% and 68%, respectively) reflect a challenging environment.

Positive

• The number of cryptocurrency ETPs increased by 50% to 162.
• An average of one new ETP was launched each week during the bear market.

Negative

• Assets Under Management (AUM) decreased by 66% to $20 billion.
• Cryptocurrency market values fell 64% during the period.
• Bitcoin and Ethereum prices dropped by 65% and 68%, respectively.

LONDON, Jan. 17, 2023 /PRNewswire/ - Fineqia International Inc.'s (the "Company" or "Fineqia") (CSE: FNQ) (OTC: FNQQF) (Frankfurt: FNQA) analysis of Exchange Traded Products (ETPs) worldwide that have cryptocurrencies as underlying assets, indicated that the number of ETPs increased 50% to 162 from 109 in 2022, even as their Assets Under Management (AUMs) decreased 66%, mirroring the 64%  fall in cryptocurrency market values during the same period.

Fineqia research revealed that the number of ETPs increased by 53 to 162 in Dec. from 109 in Jan. Conversely, their total AUM declined to a third of their value to $20 billion from $58.5 billion in 2022. The price of Bitcoin (BTC) dropped by 65%, while Ethereum (ETH) decreased by 68% during Jan-Dec. 2022 period.

For the month of Dec., the AUM of ETPs decreased by 5%, while the value of the cryptocurrency market dropped 8% to about $800 million. That implied a total decline of 64% in 2022 from $2.2 trillion last January.

"The fact that an average of one new ETP was issued each week, despite the bear market in 2022, can be seen as an indication of continued investor appetite for this asset class," said Fineqia's CEO Bundeep Singh Rangar. "Specific events, such as the bankruptcy of FTX, contributed to a fall in crypto prices and resultant AUMs."

ETPs started during bear markets experienced significant growth in subsequent bull markets. Grayscale's  Litecoin Trust (LTCN) launched in 2018, for example, grew more than 220x from an initial AUM of approx. $472k to about $104 million. Similarly, the AUM of two 21 Shares ETPs increased about 120x from the time of their launch in 2019. The 21Shares Ethereum ETP (AETH) grew from about $1.3 million to $155 million and that of the 21Shares Bitcoin ETP (ABTC) increased from $1.2 million to nearly $145 million.

By contrast, ETPs launch around the time of BTC's all-time high of more than $65,000 in Nov. 2021, such as the ProShares Bitcoin Strategy ETF, launched on Oct. 18, 2021, dropped 54% to about $549 million from $1.2 billion. Similarly, the Invesco Physical Bitcoin ETN started on Nov. 22, 2021, fell 70% to about $52 million from an initial $171 million.

In the month of Dec., the AUM ETPs holding BTC dropped by 3% to $13.5 billion from $14 billion. The AUM of ETH-denominated ETPs decreased by 7.5% to $5 billion from $5.3 billion. ETPs representing alternative coins decreased by 18% and those with a basket of cryptocurrencies dropped by 8%.

One ETP that had the FTX token (FTT) as its underlying asset was removed from trading, decreasing the total number of ETPs by one to 162, from the 163 previously listed. 

All references are in US dollars and 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.

About Fineqia International Inc.

Fineqia (www.fineqia.com) is a listed entity in 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 the administration of debt securities. Fineqia is building out its alternative finance business and holds a growing portfolio of blockchain, fintech and cryptocurrency technology companies worldwide.

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 increase in the number of cryptocurrency ETPs reported by Fineqia in 2022?

Fineqia reported a 50% increase in the number of cryptocurrency ETPs, rising to 162.

How much did the Assets Under Management (AUM) for cryptocurrency ETPs decrease in 2022?

The AUM for cryptocurrency ETPs decreased by 66%, from $58.5 billion to $20 billion.

What was the change in the cryptocurrency market value as stated by Fineqia's report?

The cryptocurrency market value fell by 64% during 2022.

How did Bitcoin and Ethereum prices perform throughout 2022 according to Fineqia?

Bitcoin and Ethereum saw price declines of 65% and 68%, respectively.