The cryptocurrency markets are on tenterhooks awaiting an announcement from the US Securities and Exchange Commission (SEC) on the fate of spot-bitcoin exchange-traded funds.
Twitter blunder or not, the SEC is widely expected to give the nod to these approvals, with some market participants hoping to hear the word by the end of the week.
But bitcoin could suffer a massive blow if, on the off chance, approvals get delayed, or even cancelled at the last minute.
That is unlikely given the amount of effort going into the negotiations.
The US also risks falling behind the rest of the world in democratising institutional access to the standard bearer of digital asset investments.
Global markets push on with bitcoin ETFs
Despite heel-dragging from the SEC, Europe, Canada and Brazil and Dubai, among other jurisdictions.
According to digital asset and fintech investment firm Fineqia International, assets under management (AUM) in exchange-traded products (ETPs) holding digital assets as underlying collateral surged by a factor of 2.5 in 2023 to reach nearly $50 billion, up from $20 billion in the previous year.
BTC-denominated ETPs have seen a substantial uptick due to the cryptocurrency's 155% price rise this year.
This growth has outpaced the overall increase in the digital asset market, with Bitcoin's share in ETP AUM standing at 72%, significantly higher than its 53% share in the broader digital asset market.
“BTC was the sled dog pulling the (digital asset) ETF sleigh this season,” said Fineqia chief executive Bundeep Singh Rangar. “Investors believe they might even have sighted a Santa at the SEC.”
In the fourth quarter alone, ETPs with BTC as the underlying asset grew 64% to $35.6 billion from $21.7 billion.
Fineqia’s data also shed light on the performance of Ethereum (ETH) denominated ETPs.
These ETPs experienced a 40.8% growth in their AUM during the fourth quarter of 2023, surpassing the 35.9% price increase of ETH itself. This indicates a strong investor interest and capital inflow into Ethereum-based investment products.
Worldwide crypto ETPs AUM grew at a 19% premium compared to the value of underlying digital assets, which grew slower at 123%.
This is attributed primarily to Bitcoin’s share of ETP AUM at 72%, larger than its 53% share of the overall digital asset market.
During 2023, ETPs holding individual altcoins showed a 165% increase in AUM to $2.23 billion from $842 million.
The fourth quarter was the main period of this growth, with a 142% AUM increase from the $923 million recorded at the end of the third quarter.