Fineqia International Inc (CSE:FNQ, OTC:FNQQF) earlier this week discussed the record-breaking growth in digital asset Exchange Traded Products (ETPs), which surpassed $200 billion in assets under management (AUM) in July.
Senior associate Matteo Greco talked with Proactive about the record-breaking growth in digital asset Exchange Traded Products (ETPs), attributing the milestone to a combination of strong market performance and increasing institutional demand.
Proactive: You're out with your monthly ETP report and July saw digital assets, ETP assets under management pass $200 billion for the first time. What's driving this record-breaking growth?
Matteo Greco: I's a multiple factor thing. On one end we're having a strong performance in the market. We've seen Bitcoin printing its all-time high (this week), Ethereum trading near its all-time high, and BNB trading incredibly high. Most of the main digital assets are at or near all-time highs. This increases AUM for the underlying assets. Plus, positive market momentum increases demand, so there’s also more underlying being held as people buy. These factors combined brought AUM past $200 billion for the first time.
Looking within all of that, Ethereum ETPs surged over 87% in assets under management in July. What factors are behind this dramatic rebound and is it sustainable?
Ethereum is the best example of what I mentioned in the first question. The price grew 48% in July, and in the first couple of weeks of August it rose over 25% again. That means over six weeks, the price doubled, and compared to April, it has increased more than 2.5 times. This strong momentum drove demand for Ethereum ETPs.
Recently, there has also been strong interest from digital asset treasury strategies, with Ethereum becoming a key focus alongside Bitcoin.
In terms of sustainability, growth at this pace can’t continue forever, but long term, Ethereum is likely to maintain good momentum as the second-largest digital asset.
Altcoin-linked ETPs outperformed basket products last month. Is this a sign of shifting investor risk appetite?
This is a typical phase we see every cycle — what’s known as an “alt season.” Bitcoin dominance fell about 8% in the last four weeks and 10% since the start of July, which often happens during strong altcoin seasons. Bitcoin’s price has been relatively flat above $100,000 for some time, apart from short-term fluctuations. This environment, combined with narratives like digital asset treasury strategies, has supported altcoin growth.
Institutional inflows into ETPs continue to outpace underlying asset price gains. What does that tell you about market maturity?
The market is maturing quickly. In previous cycles people claimed it was the “cycle of institutional” but this time it really is. Since early 2023, when the bull market began after a negative 2022, AUM for crypto ETPs has increased tenfold. Narrowing to 2024, after Bitcoin and Ethereum ETFs were approved, there has still been a fourfold increase in AUM and a 50% increase in the number of products listed worldwide. More institutions are coming in, and there’s no way back from that.
With improving regulatory clarity worldwide, which new digital asset ETP products or markets are you watching most closely?
It depends on the jurisdiction. In Europe, ETPs have been available for years, with spot products followed by staking products. In the US, Bitcoin and Ethereum spot products have only recently been approved, and there are many applications for other assets. I expect more US ETFs beyond Bitcoin and Ethereum, possibly with staking rewards.
In Europe, the focus now is on diversifying yield sources and optimizing yield, which is what we’re doing at Fineqia with products tapping into DeFi. I also expect the next wave to be yield optimization.
Quotes have been lightly edited for style and clarity