The Continual Surge in Cryptocurrency Prices Boosts AUM of Cryptocurrency Investment Products

According to data from CryptoCompare, due to the continuous surge in cryptocurrency prices, the AUM of cryptocurrency investment products climbed for the fourth consecutive month in March, increasing to $13.4 billion, an increase of 10.9% compared to February and 60% compared to November last year. In November, due to the collapse of FTX, the AUM fell to its lowest level in 2022.

Data: The scale of encryption investment products climbed to $13.4 billion in March

Cryptocurrency investment products are in high demand as cryptocurrency prices continue to surge. As per data from CryptoCompare, the Assets Under Management (AUM) of cryptocurrency investment products rose for the fourth consecutive month in March, reaching $13.4 billion, a growth of 10.9% when compared to February and 60% compared to November last year. However, in November 2020, AUM had fallen to the lowest point in 2022, following the collapse of FTX.
# Introduction
Cryptocurrency investment products, such as exchange-traded products and trust funds, primarily invest in cryptocurrencies like Bitcoin and Ethereum. These products offer passive exposure to cryptocurrency markets and are increasingly gaining popularity among investors who want to profit from the growing cryptocurrency market without the hassles of directly holding the cryptocurrencies. Furthermore, as the cryptocurrency market value surged over $2 trillion, investors’ interest in these products increased.
# The Factors Behind the Progress in AUM of Cryptocurrency Investment Products
The continuous surge of cryptocurrency prices played a vital role in increasing the AUM of cryptocurrency investment products. For instance, Bitcoin, the largest cryptocurrency in market capitalization, crossed $50,000 on February 16, 2021, before reaching an all-time high price of $64,863 in April 2021. Thus, as Bitcoin prices surged, investors’ appetite for cryptocurrency investment products also increased, leading to an increase in AUM.
Furthermore, the increased adoption of cryptocurrencies in recent years and the growing institutional investors’ interest boosted the confidence of investors in cryptocurrency investment products. It resulted in a higher investment and an increase in the total value of AUM. Furthermore, the introduction of new financial products, such as the first Bitcoin ETF in Canada, has provided even more opportunities to invest in cryptocurrencies, leading to a surge in AUM.
# The Rise of AUM of Cryptocurrency Investment Products
The total AUM of cryptocurrency investment products reached $13.4 billion, a growth of 10.9% compared to February and 60% compared to November 2020, where the AUM had fallen to its lowest point following the collapse of a popular crypto derivatives trading platform, FTX.
The table below shows the progression of the AUM of cryptocurrency investment products.
| Month | AUM of Cryptocurrency Investment Products (in billion USD) |
|———–|———————————————————–|
| November | 9.9 |
| December | 12.2 |
| January | 13.7 |
| February | 12.1 |
| March | 13.4 |
# Conclusion
The increasing demand for cryptocurrency investment products is a clear indication that institutional investors and wealthy individuals are becoming more comfortable investing in cryptocurrencies markets. Moreover, due to the critical role played by cryptocurrencies in the global financial system, cryptocurrency investment products have gained interest from traditional financial institutions. The rise in AUM highlights the progress of the cryptocurrency industry and its potential impact on the worldwide financial system.
# FAQs:
Q. Why did the AUM of cryptocurrency investment products fall in November 2020?
A: The AUM of cryptocurrency investment products fell in November 2020 because of the collapse of a popular crypto derivatives trading platform, FTX.
Q: What is the role of the continuous surge in cryptocurrency prices in the growth of AUM?
A: The continuous surge in cryptocurrency prices played a vital role in increasing the AUM of cryptocurrency investment products. Investors’ interest in these products increases as the value of cryptocurrencies boom.
Q: Why are investors choosing cryptocurrency investment products over cryptocurrencies?
A: Investors are choosing cryptocurrency investment products over cryptocurrencies due to the growing demand for passive exposure to cryptocurrency markets without the technicalities of directly holding cryptocurrencies.