Crypto ETP Trading Volume Drops to Two-Year Low

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According to CryptoCompare, an FCA-authorized benchmark manager and digital asset information provider, the average daily trading volume of first-time cryptocurrency exchanges fell below $100m in September.

CryptoCompare said in it Digital asset management review That average daily total digital asset investment proceeds fell 24.1% to $939 million in September, continuing a steady decline in volume since November 2021. The report said: “In addition, the average daily volume for the first month since September 2020 was recorded. They fell below $100 million.

According to CryptoCompare, the average daily volume is down 79.9% from its peak in January this year.

Source: CryptoCompare

Trading volumes fell along with the value of crypto assets in September as the US Federal Reserve hiked by 75 basis points.

“This September (since the 28th), the price of Bitcoin and Ethereum fell by 4.77% and 15.9%,” said CryptoCompare. “As a result, this has had a negative impact on assets under management of digital asset products, which has proven that the integration incentive has no support for Ethereum-based ETPs.”

The integration operates from the Ethereum blockchain’s proof-of-work as a consensus mechanism, how all computers holding the blockchain agree to add new transactions, to proof-of-stake.

“The combination of speculation earlier this month and the ‘rumour’ of buy activity from traders has pushed the asset to near-term highs on Bitcoin,” the report said. “However, the optimism quickly faded as the price of ETH fell sharply after the merger, reflecting the current economic downturn.”

In September, since the 26th, all digital assets based on Ethereum have decreased by more than 10%, according to CryptoCompare. After the merger, Ethereum products recorded a negative net flow of $26.4m in September, the largest of any asset CryptoCompare has.

The data provider expects investors to shift to short bitcoin products to take profits or to hedge their cryptocurrency holdings as macro conditions worsen and crypto asset prices continue to decline. As a result, short Bitcoin products increased assets under management in September.

Source: CryptoCompare

Globally listed crypto ETFs and ETPs had a net inflow of $83 million in August, according to ETFGI, an independent research and advisory firm that covers trends in the global ETFs/ETPs ecosystem.

The outflow in August took year-to-date net income to $712m, well below the $4.2bn collected at the same point last year.

Total assets invested in crypto ETFs and ETPs decreased by 10% from the end of July 2022 to $7.4 billion at the end of August 2022. Assets are down 54% this year from $16.1bn at the end of 2021.

Savings Product Indices

In September, CryptoCompare and Blockdaemon, an institutional-level blockchain infrastructure company for node management and staking, announced the launch of their industry-first family of product indexes.

A suite of indices designed to measure annualized returns generated by digital assets, allowing institutional investors to generate total return and leverage products, benchmark portfolios, and conduct research.

In proof-of-stake blockchains, participants delegate or share their digital assets to validator nodes.

Charles Hayter, CEO and founder of CryptoCompare, said in a statement that the new indexes overcome the limitations faced by traditional indexes and ignore the rewards generated by the underlying cryptocurrency. Hayter added, “These new innovative indices remove this barrier, open the door to new market participants, and provide investors with a vehicle for exposure to the opportunities they invite.”

ETC Group, an institutionally focused digital asset manager in Europe, will be the first to license a family of staking product indices for a series of products planned for the fourth quarter of this year.

ETC Group CEO Tim Bevan said in a statement: “We see this as an important step in providing institutional investors with better access to the digital assets marketplace. Clear, independent benchmark data provides the reference points needed to navigate successfully and confidently.

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