crypto ETF

ETH products grow in August as BTC products dip: CryptoCompare report

The upcoming Merge has contributed to a rise in Ethereum investment products and trading volume, as crypto market AUM figures continue to drop amid the bear market

Ethereum investment products increased by 2.36% to $6.81 billion in assets under management (AUM) throughout August, outperforming Bitcoin products which saw a 7.16% drop off to $17.4 billion.

The figures were contained in a new report by CryptoCompare.

This was also reflected in the Bitcoin (BTC) and Ether (ETH) product trading volumes, with Grayscale’s most notable Bitcoin product, GBTC, experiencing a 24.4% drop in volume while its Ethereum product, GETH, actually increased by 23.2%. CryptoCompare’s report suggested that the highly anticipated Ethereum Merge was the cause behind the change in trading volumes:

“Indeed, even at a more granular level, no Bitcoin products covered in this report saw AUM or volume gains in the month of August. We could be seeing interest move away from Bitcoin in the short term, as Ethereum-based products hold the attention with the much-anticipated merge on the horizon.”

Monthly AUM figures for digital asset investment products fell 4% overall, which was largely attributed to a 6% fall from Grayscale’s GBTC product, as it accounts for $13.4 billion of the total $25.8 billion of digital assets under management at 53.4%.

The largest inflows came from products falling under the “Other” umbrella, representing non-Bitcoin and Ether products, which saw a 12.3% increase to $1.13 billion over the first three weeks, according to the report.

*Monthly AUM figures for digital asset investment products have steadily dropped throughout the bear market. Source: Crypto Compare.*

Despite the bear market, a number of highly-regarded financial institutions have launched crypto investment products throughout the month of August. These products have come in the form of exchange-traded funds (ETFs), exchange-traded certificates (ETC), exchange-traded notes (ETN) and trust products.

Among the most notable was BlackRock’s private spot Bitcoin Trust, a move that brought about a “here comes Wall Street” response from former Grayscale CEO Barry Silbert. The launch of the Bitcoin Trust from the world’s largest asset manager came following its partnership with Coinbase to provide its clients with institutional trading services.

Charles Schwab was another financial institution to make a play this month, having launched its own “Schwab Crypto Thematic ETF” tickered STCE on the New York Stock Exchange, which provides exposure to a mix of mining and staking companies, along with several blockchain-based applications.

BetaShares launched Australia’s first Metaverse-focused ETF on the Australian Stock Exchange (ASX), along with a new Metaverse- and nonfungible token (NFT)-focused ETF launched by finance firm SoFi.

Two more spot crypto ETFs launch on Australian markets

Both of the new Australian exchange-traded funds by 3iQ Digital Asset Management will feed from its existing Bitcoin and Ethereum ETFs listed on the Toronto Stock Exchange.

A further two cryptocurrency-backed exchange-traded funds (ETF) have launched on the Cboe Australia exchange on Monday, bringing the total amount of crypto ETFs available to Australian traders to six.

The Canada-based 3iQ Digital Asset Management launched two spot ETFs, the 3iQ CoinShares Bitcoin (BTC) Feeder ETF and the 3iQ CoinShares Ether (ETH) Feeder ETF.

Both of the Australian funds feed from the firm’s Canadian ETFs listed on the Toronto Stock Exchange (TSX), the 3iQ CoinShares Bitcoin ETF, and the 3iQ CoinShares Ether ETF. The underlying assets of the Canadian ETFs are holdings of BTC and ETH held in cold storage by the Gemini crypto exchange.

3iQ’s funds join the Bitcoin- and Ether-backed funds by 21Shares and Cosmos Asset Management, the latter of which saw launch delays in April due to a still-unnamed service provider needing time to support the launch.

Three ETFs, a Bitcoin and Ether ETF by 21Shares, and a Bitcoin ETF by Cosmos eventually opened to trading in early May, becoming the first crypto ETFs in Australia. Cosmos later released an Ether-backed fund on May 31.

Much like 3iQ funds, the underlying assets for the Cosmos ETFs are direct investments into the Canadian Purpose Bitcoin and Ether ETFs, while the funds issued by 21Shares are backed by Bitcoin and Ether reserves held in cold storage by Coinbase.

A point of difference is that 3iQ boasts having the lowest expense ratio out of the six at 1.2% — 0.05% lower than the 21Shares and Cosmos ETFs, each with an expense ratio of 1.25%.

The three original funds by 21Shares and Cosmos had a sluggish start to trading, only seeing $1.3 million in volume on the day of launch, far below the estimated $1 billion of expected inflows. The two 21Shares funds received a total of around $936,500 of total inflows, while Cosmos’ Bitcoin fund received just over $398,000.

According to data from Cboe at the time of writing, the two 3iQ ETFs have seen a volume of 13,592 and 9,754 shares traded of the Bitcoin and Ether ETFs, respectively, accounting for around $73,415 and $73,605, respectively, for a total of over $147,000, much smaller than its competitors.