Crypto News: As ether and non-bitcoin funds receive inflows, cryptocurrency investors are looking to diversify.2 min read
As a result of Bitcoin’s AUM dropping by 7.16% to $17.4 billion in August, its market share decreased to 67.6% of all AUM from 76.9% in July. With a market share of 26.5%, Ethereum products have reached their highest level since the year’s beginning.
According to a report by digital asset data provider CryptoCompare, after a number of high-profile crashes earlier this year, international cryptocurrency investors may be looking to diversify their portfolios to protect themselves from any additional potential black swan events.
According to data, global crypto funds with assets falling under the category of “other” (representing non-Bitcoin and non-Ethereum products) saw the biggest increases in asset under management (AUM), increasing 12.3% to $1.13 billion as of 23 August.
Multi-asset and other fund categories saw positive net flows during the first three weeks of this month, totaling $1.3 million and $0.8 million, respectively.
The report added that Ethereum-based cryptocurrency funds had driven the recovery in July and had continued to perform well in August.
While Ethereum-based products saw gains of 2.36% to $6.81 billion during August, assets for bitcoin-based products saw a decline of 7.16% to $17.4 billion.
Even at a more detailed level, none of the bitcoin products covered by the report experienced increases in AUM or volume in August. According to CryptoCompare, interest in bitcoin may be waning in the near future as Ethereum-based products garner attention ahead of the much-anticipated “merge.”
Ethereum is transition to proof-of-stake for its consensus protocol. The software update, known as the “merge,” has been planned for years and will change the way Ethereum orders transactions to make them more energy-efficient.
The reports noted that as of August 23, 2022, the total AUM across all digital asset investment products had decreased by 4 since the end of July 2022 to $25.8 billion.
As a result of bitcoin’s AUM dropping by 7.16% to $17.4 billion in August, its market share decreased to 67.6% of all AUM from 76.9% in July. With a market share of 26.5%, Ethereum products have reached their highest level since the year’s beginning.
The majority of AUM, $19.0 billion (73.7% of total), was still made up primarily of Grayscale products, followed by XBT Provider’s products ($1.49 billion, or 5.78% of total) and 21 Shares ($1.04 billion, or 4.04% of total).
Grayscale products are preferred by global institutional investors.
In addition, AUM held by ETFs decreased in August, dropping 0.64% to $2.48 billion and holding 11% of the market.
According to the report, from July to August, average daily aggregate volumes across all digital asset investment products decreased by an average of 1.01% to $131 million, indicating market weakness.