Crypto news: Cryptocurrencies in October had the long-awaited rebound in anticipation of a less aggressive stance by the Federal Reserve pushing since the beginning of the year, Bitcoin and Ethereum up 3.38% and 9.90% (as of 25 October).
The volume of Institutional Digital Assets has been noted since June 2020, and the October figure was the lowest ever recorded with average daily trading volume down 34.1% to $61.3 million (only one other time had VMGs been below $100 million).
Purpose ETF products recorded an increase in trading volume with Purpose Bitcoin ETF (BTCC) and Ether ETF (ETHH) up 298% and 172% respectively.
Bitcoin over time has won the role of a strategic asset and now there is no investor whether institutional or not who can disregard a percentage of BTC in their portfolio.
Summary
The most relevant crypto news in the market
Especially from the Covid period onward, BTC has experienced a major rise among insiders who increasingly see it as a safe haven asset to be used to counter an inflation that has not yet decided to leave the real economy and markets alone.
While the stakes imposed by regulations become clearer and clearer over time, and institutional investors can already enjoy MiCA and the extensive US regulations in this regard, ETNs and ETFs are becoming increasingly used instruments.
These instruments make it possible to approach the world of cryptocurrencies without owning them directly and within a well-delineated regulatory framework.
In anticipation of milder moves by the Federal Reserve and other central banks around the world coming off months of ironclad monetary policies to the tune of rate hikes in October, markets took a physiological breather.
Bitcoin and Ethereum rose 3.38% and 9.90% (ETH was affected by the Merge event that changed the digital currency to proof of stake).
Consequently, digital asset products also appreciated, and it can be seen that those based on ETH grew by 3.35% while those based on Bitcoin grew by 2.55%.
The same trend was true for trust products, which grew by 2.33% to $17.7 billion.
While October was a noteworthy month in many respects for cryptocurrencies, September was a downward month for all crypto products.
If we look at volumes they still struggle to grow and in fact record the worst performance since June 2020 to date with -34.1% ($61.3 million only).
Crypto news: the performance of crypto ETFs
Purpose ETF products rose in trading volume with Purpose Bitcoin ETF
(BTCC) and Ether ETF (ETHH) up 298% and 172%, respectively.
ETH/USD registered returns of 9.91%.
Physical Exchange Traded Open-Ended Exchange Traded Fund (ETF) hold the underlying assets that the fund replicates.
An Exchange Traded Note (ETN) is similar to an ETF because it can be easily traded on an exchange.
A significant distinction between the two is that you do not own the underlying asset for an ETN: it is a debt security guaranteed by a bank or institution and usually comes in the form of a bearer certificate; the investors can invest their money in this product and are entitled to returns based on the varying value of the underlying assets on which it is based. These products generally have fewer regulatory guarantee requirements than ETFs and can be fully guaranteed or unsecured.
An Investment Trust is a type of closed-end fund established by a company so that its shares can be bought and sold on a stock exchange or OTC market. This investment trust invests in a portfolio of assets; therefore, the value of the company’s share is linked to the value of the underlying assets it holds.
In October, the total increase in all digital asset investment products increased by 1.76% to $22.9 billion.
Grayscale products continue to account for the vast majority of AUM at $17 billion (74.1% of total), followed by XBT Provider products at $1.30 billion (5.66% of total) and 21Shares at $931 million (2.77% of total).
Average weekly net flows increased this month with an average of $730,000 compared to average weekly outflows of $9.20 million in September.
Weekly net flows for Bitcoin-based products averaged inflows of $8.37 million in October, whereas exchange-traded ETCs were largely those of CoinShares’ XBTs whose Euro Tracker was confirmed as the top performer for the largest increase among ETCs in October, up 2.69% to $419 million.
Average daily aggregate product volumes across all digital asset investment products fell 34.1% to $61.3 million in October, continuing the downward trend in volumes observed since November 2021 (except for a slight increase of 0.39% in May).
This is the second month since September 2020 in which average daily volumes have fallen below $100 million.
Innovative crypto indices and products
The MVDA Index, which is a market index that replicates the performance of a basket of 100 major digital assets, rose 6.86% over the 30-day period.
The index is a benchmark for other MVIS CryptoCompare Digital Assets indices.
On 28 September, CryptoCompare Blockdaemon, the leading institutional-grade blockchain (node management and staking infrastructure company), announced the launch of their Staking Yield that enables more informed investments and sophisticated strategies in a regulated and secure environment.
The CryptoCompare Blockdaemon Staking Yield Index family is designed to measure the annualized daily staking rate of return generated by the digital asset, enabling institutional investors to create total return and yield swap products, benchmark portfolios, conduct research and more.
The Index family will do this initially by presenting five regulated indexes that capture the annualized daily staking return of the top-performing digital asset PoS: Avalanche, Cardano, Cosmos, Polkadot, and Solana.
