Digital asset management companies thrive in 2023 despite Bitcoin and Ethereum’s May downturn
CCData's monthly snapshot on trends in the digital assets industry shows institutional investors' continued interest in Bitcoin and Ethereum despite fluctuations and uncertainty.
CCData’s Digital Asset Management Review for May found that Bitcoin, with its finite supply and resistance to governmental control, continues to solidify its position as a compelling asset class for institutional investors.
The Financial Conduct Authority (FCA)-authorized benchmark administrator’s report provides real-time and historical data on digital assets for both institutional and retail investors.
Bitcoin, Ethereum battered but resilient
Bitcoin and Ethereum-based products experienced their first dip of the year, with declines of 10.3% and 4.42%, reducing their total AUM to $21.7 billion and $7.50 billion, respectively. Consequently, Bitcoin’s market share fell slightly to 70.9%, while Ethereum’s rose to 24.5%.
Further, despite an overall contraction for the first time in 2023, digital asset management firms have seen a robust increase in their year-to-date (YTD) assets under management (AUM). Standouts include CI Galaxy, ProShares, and ETC Group, all of which posted significant growth in their AUMs.
May saw a downward trend in the average daily aggregate volumes of digital asset investment products, marking a second consecutive monthly drop. However, resilience is evident as the total AUM for digital asset investment products, despite falling by 8.92% to $30.6 billion in May, still represents a 55.5% YTD increase.
Broader markets and trust products
As the broader digital asset market navigated through a downturn in May, all categories of digital asset investment products, namely ETCs, trust products, ETFs, and ETNs experienced declines. Notably, trust products, dominated by Grayscale, saw an 8.61% decrease, totaling $23.9 billion.
Average daily aggregate volumes for digital asset investment products in May dropped 24.6% to $209 million, the second-lowest record for 2023. The average daily volumes for ETNs and ETFs fell 15.9% to $172 million, with Bitcoin-based products accounting for the majority.
May was also a significant month for VanEck and CI Galaxy, with the former seeing a 2.25% increase in AUM to $334 million and the latter a decrease of 3.45% to $523 million. Dominant market player Grayscale, despite an 8.66% decrease in AUM from April to May, maintained a stronghold with a total AUM of $23.0 billion, reflecting a notable 57.6% YTD increase.
Despite May’s dip, YTD figures underscore a significant increase in AUM for digital asset management companies. CI Galaxy emerged as the frontrunner, boasting a 118% YTD increase in AUM. ProShares and ETC Group followed, posting 80.1% and 71.5% YTD increases, respectively.
On the trust product front, Grayscale’s Bitcoin Trust (GBTC) and Ethereum Trust (ETHE) continued to lead despite AUM decreases of 9.93% and 4.67%, totaling $16.8 billion and $5.52 billion, respectively. Among ETN/ETF products, ProShares BITO maintained the pole position, while in the ETC space, XBT Provider by CoinShares held the majority of AUM across all ETCs.