Investment into Crypto Products Dip for First Time in 2023

The total assets under management (AUM) for crypto investment products declined for the first time this year during this month (May), shedding 8.92% to reach $30.6 billion. On the contrary, investment surged by over 55.5% on a year-to-date (YTD) basis.

These are according to new data by digital asset data provider, CCData previously known as CryptoCompare. CCData is also a benchmark administrator authorized by the UK Financial Conduct Authority.

First Drop in Crypto Investment AUM

According to CCData, the AUM for Bitcoin and Ether-based products dropped for the first time this month, falling 10.3% and 4.42%to $21.7 billion and $7.50 billion, respectively. As a result of the decrease, the share of Bitcoin in the crypto-based product market shrank to 70.9%, dropping from 72% in April. On the contrary, Ether’s market share rose slightly to 24.5%, which is up from 23.4% in the prior month.

In line with the monthly drop in AUM, the average daily aggregate volumes of crypto investment products also went down for the second consecutive month. Additionally, the volumes shrank by 24.6% to $209 million.

“This decline followed a period of relative stability in the market, characterised by digital assets like Bitcoin trading within a narrow range,” CCData explained. “As a result, the digital asset industry witnessed its second lowest volume of 2023, with volumes only higher than those re-recorded in January.”

‘Ongoing Growth amid Challenging Market Conditions’

However, despite recording the first monthly drop in 2023, the market’s YTD growth suggests “resilience and ongoing growth amidst challenging market conditions,” CCData said.

In addition, the growth is a testament that the industry is seeing overall expansion along with “positive momentum and investor interest surrounding digital asset management,” the crypto data provider added.

In terms of performance by companies in the market, investment management firm VanEck exhibited the highest increase in AUM during the month, followed by its rival CI Galaxy. VanEck's AUM rose 2.25% to $334 million while its rival saw a decline of 3.45% to $523 million.

However, on a YTD basis, GI Galaxy is the frontrunner, with total assets under its management doubling to 118%. This was followed by ProShares and ETC Group with 80.1% and 71.5% increases in AUM, respectively.

Furthermore, while Grayscale saw its AUM retreat 8.66% to $23 billion in May, the digital asset management firm remains the biggest player in the crypto products market. Also, when compared YTD, the company’s AUM jumped 57.6% for this month.

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