Institutions help drive the rise as Bitcoin ETP volumes increase by 50%

Bitcoin’s ETPs and crypto-currencies have increased their capitalisation and market volumes as institutions buy BTC.

Recent research has revealed that institutional grade exchange products increased in volume this month.

A CryptoCompare report delves into some of the metrics behind Bitcoin’s epic bull run to a new high of $17,800 in 2020, and reveals that institutions have been a driving force.

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The Digital Asset Management Review found that aggregate volumes of trade exchange (TEP) products have increased by 53% over the past 30 days. The average daily volume is now $173.5 million, compared to $113 million in October. ETPs are types of securities that track underlying securities, indices or financial instruments, in this case Bitcoin.

The report cited Grayscale’s Bitcoin Trust product as one of the main drivers of the momentum, exceeding $9 billion in assets under management. (However, the institutional fund’s latest update released on November 18 states that it has reached a milestone of $10 billion in digital assets under management.) ) Grayscale now has half a million BTCs.
Grayscale’s Ethereum Trust (ETHE) product followed with assets under management of $1.7 billion, an increase of more than 40% over the previous 30 days. The institutional grade fund provider has also been accumulating Litecoin, which now represents $58 million in AUM, surpassing the Bitcoin Cash Trust, which has $46 million.

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The report added that the 3iQ Bitcoin Fund (QBTC) experienced its highest returns in the last 30 days at just over 49%. 3iQ is Canada’s largest asset fund manager of Bitcoin and crypto-currencies.

ETC Group’s BTCE product experienced the largest percentage increase in AUM, almost doubling to $116 million, a 93% increase from the previous 30 days. Average BTCE product volume tripled in November to $8.87m per day, which is more than 200% higher than the October average.

The BTCE fund was launched in June 2020, becoming the first Bitcoin-based ETP to be listed on XETRA, a commercial technology platform operated by the Deutsche Börse Group.

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Meanwhile, WisdomTree’s BTCW experienced a 65% increase in AUM to $79 million over the same period. WisdomTree is a New York-based publicly traded fund and ETP’s sponsor and asset manager.

Institutional grade products are playing a much bigger role in the Bitcoin rally in 2020. The last time BTC rose to these prices in 2017, the Chicago Mercantile Exchange and the Chicago Board Options Exchange had just launched Bitcoin’s first institutional futures products for the asset.