Crypto Investment Products AUM Hits All-Time High Amid Surge in Spot Bitcoin ETFs

Crypto Investment Products AUM Hits All-Time High Amid Surge in Spot Bitcoin ETFs

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Monday 04 July 2022 12:57

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Data from CryptoCompare shows that the price of Bitcoin continued to decline throughout the past week, starting at around $21,500 and falling to $18,500 before recovering slightly. The cryptocurrency is now trading at $19,400.

Ethereum’s Ether, the second-largest cryptocurrency by market capitalization, started the week with a sharp decline that took it from $1,200 to $1,000 before stabilizing. ETH is now trading at $1,070.

This week, headlines in the cryptocurrency space focused heavily on the “huge outflows” seen in cryptocurrency investment products, with their total assets under management (AUM) hitting highs. record in June.

The AUM of all major types of cryptocurrency investment products fell sharply last month, with exchange-traded funds seeing the biggest drop, falling 52% to $1.31 billion in AUM according to CryptoCompare’s Digital Asset Management Review.

The report details that weekly outflows for Bitcoin-based products averaged an all-time high of $161 million in June, while Ethereum-based products averaged outflows of $33.2 million per week.

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These outflows are associated with the ongoing sell-off in the cryptocurrency market, exacerbated by struggling cryptocurrency firms that have laid off staff and frozen withdrawals from their platforms citing “extreme market conditions.” “. Crypto lender Celsius Network has reportedly been advised to file for bankruptcy, while rival lender babel Finance and crypto exchange CoinFLEX have frozen withdrawals.

Earlier this week, it was revealed that major cryptocurrency hedge fund Three Arrows Capital had defaulted on a $670 million loan from digital asset brokerage Voyager Digital, which issued a notice stating that the fund had failed to repay a loan of $350 million USDC and 15,250 BTC.

Voyager initially said it intended to pursue collection from Three Arrows Capital and would, in the meantime, continue to process customer orders and withdrawals. The company has since halted withdrawals.

As crypto investment products saw major outflows last month, cryptocurrency firms continued to fight to list a Bitcoin ETF in the United States, with Grayscale Investments suing the US Securities and Exchange Commission (SEC). United States after the regulatory agency rejected its request to convert its flagship product. Grayscale Bitcoin Trust in a spot Bitcoin ETF.

The SEC rejected Grayscale’s request citing concerns about market manipulation, Tether’s role in the broader Bitcoin ecosystem, and the lack of an agreement to share oversight between a “significantly sized regulated market.” ” and a regulated exchange.

Investment giant VanEck has also filed a new request for a spot Bitcoin ETF with the SEC, eight months after the regulator rejected its previous request. Proponents of such an ETF argued that the product would provide investors with an inexpensive and easily accessible way for individuals and institutions to invest in BTC.

Meanwhile, some have taken advantage of the ongoing bear market, with El Salvador adding another 80 bitcoins to its treasury at a price of $19,000 a coin, according to the country’s president, Nayib Bukele, who said on social media: “The bitcoin is the future. .”

Similarly, business intelligence firm MicroStrategy added $10 million worth of Bitcoin to its treasury, now holding 129,699 BTC.

BlockFi and FTX Agree to Potential Vesting Terms

Cryptocurrency lending company BlockFi has announced that it has reached an agreement with FTX US, the American division of the cryptocurrency exchange led by billionaire Sam Bankman-Fried, on a revolving line of credit and a potential acquisition.

The lender’s CEO, Zac Prince, revealed on social media that the deal is worth a total of $680 million and includes an “option to acquire BlockFi at a variable price of up to $240 million depending on performance triggers”.

FTX is also reportedly exploring the possibility of acquiring Robinhood Markets, the commission-free app-based brokerage. Robinhood has not received a formal takeover approach. According to sources familiar with the matter, no final decision has been made and FTX may choose not to pursue the deal.

As FTX contemplates acquisitions in the market, Canadian investment firm Cypherpunk holdings (HODL) has sold all of its bitcoin and ether holdings to weather current market risks. In total, the company sold 205.9209 ETH worth around $227,000 and 214.7203 BTC worth around $4.7 million.

EU finalizes crypto anti-money laundering rules

The European Union (EU) has reached an agreement regarding anti-money laundering rules that would apply to a large number of cryptocurrency transactions aimed at preventing money laundering, terrorist financing and other crimes.

The rules require crypto service providers to collect and store information identifying parties involved in cryptocurrency transactions, and provide that information to authorities conducting investigations. The rules, however, will not impose these tracking requirements on private wallets.

The regulation has “no minimum thresholds or exemptions for low-value transfers” and applies to all transactions involving service providers such as cryptocurrency exchanges.

Francisco Memoria is a content creator at CryptoCompare who is in love with technology and dedicated to helping people see the value in digital currencies. His work has been published in many reputable industry publications. Francisco holds various cryptocurrencies.

Image selected via Unsplash.

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