Due to the current state of panic in the cryptocurrency market following the collapse of FTX and rumors of similar problems at other exchanges, cryptocurrency investment products’ assets under management (AUM) and average daily volumes saw a significant decrease in 2022.
The average daily volume has fallen by 74.1% to $203 million in 2022, from $781 million in 2021. Average monthly AUM fell by 39.5% to $31.9 billion in 2021, compared to $52.8 billion in 2021.
According to the latest Digital Asset Management Review report from CryptoCompare, average weekly net outflows from cryptocurrency investment products reached a record high of $9.5 million in December, the highest level since June 2022.
After a slight recovery in November, the average daily volume of all cryptocurrency investment products continued to fall in December, falling 56.1% to 61.1 million as of December 20th. According to the firm, the aggregate product volume is currently 87% lower than its peak in January 2021, implying that the bear market will likely continue into 2023.
According to the report, only Bitcoin-focused investment products saw positive inflows totaling $100,000. It also mentions that Grayscale Investments revealed in a letter to investors in December that it is considering returning a portion of its Grayscale Bitcoin Trust (GBTC) funds to investors.
According to CryptoCompare, the letter came after the Securities and Exchange Commission denied Grayscale’s request for approval of its Bitcoin exchange-traded fund (ETF) (SEC). The fund currently manages $10.5 billion in assets, and the discount to Bitcoin’s price has been increasing, reaching a record high of 48.9% on December 13th.
Despite declining volumes and assets under management, Ethereum-based investment products saw “decent gains” in December, according to the report, with 3IQ’s QETH, XBTProvider’s XETHONE, and Purpose’s ETHH performing 8.5%, 6.5%, and 6.2%, respectively. Meanwhile, the returns on Bitcoin-based investment products QBTC and BTCC were 7.6% and 5.3%, respectively.