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Tuesday, May 30, 2023
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


Global market for exchange traded products shows heavy slump: Fineqia report

The decrease closely resembles the 15% drop in the overall cryptocurrency market value at the same time

Exchange traded
Photo by Kanchanara via Unsplash

The total worldwide market for Exchange Traded Products (ETP) decreased by 17 per cent in Assets Under Management (AUM) for November, according to analysis provided on Monday by Fineqia International (CSE: FNQ) (OTC: FNQQF).

ETP’s include both Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs). The total AUM fell to USD$21 billion from USD$25.3 billion between November and December across 163 listed ETP’s, according to Fineqia’s research firm.

Specifically, two ETPs that used FTX’s token as its underlying assets have stopped trading altogether, while six new ETPs were added, increasing the total listed from 159 to 163 so far in 2022. The new ETPs, which have a combined AUM of approximately $5 million, did not factor into the metrics.

“The price of cryptocurrencies dropped as a result of the FTX bankruptcy in early November,” said Bundeep Singh Rangar, Fineqia CEO. “We’re still facing contagious effects of the FTX failure that has consequentially weakened the financial position of other companies and made some of them insolvent.”

Fineqia provides a platform and services in support of securities issuances and management administration for debt securities. Its presently building out its alternative finance business and holds a portfolio of blockchain, fintech and cryptocurrency technology companies.

The overall value of cryptocurrencies fell 15 per cent to around $850 million in November, which was over 60 per cent lower than $2.2 trillion in January. But on the year to date basis, the AUM of crypto ETPs fell 64 per cent, which was similar to the 61 per cent drop in the broader crypto market. The total number of ETPs increased by 50 per cent to 163 in November compared to 109 in January, and their AUM was $21 billion compared to $58.5 billion in January.

Read more: The INX Digital Company makes a play for bankrupt cryptocurrency exchange assets

Read more: Fineqia International report displays fate of cryptoassets in 2022

Decreases in exchange traded products reflect fallout from FTX bankruptcy

In comparison, the Bitcoin’s price dropped 65 per cent and Ethereum’s dropped 67 per cent between January and November. These numbers are heavily influenced by the number of crypto-related exchanges and other firms that have revealed exposure to collapsed crypto-exchange FTX.

These firms include Binance, BlockFi, Coinbase, Coinshares, Galaxy Digital, Genesis Global Trading, and Voyager Digital, among others.

Ethereum prices fell courtesy of hackers selling their ethereum stolen from FTX. The estimates range from over 50,000 ETH and there is still over 200K ETH out there. More selling could further hurt the price of Ethereum.

The AUM of ETPs using ETH fell by 18 per cent while the crypto’s price fell by 23 per cent. Ethereum’s price is $1,259.43 at the time of writing, and that’s down from almost $1,600. Their AUM fell to $5.3 billion from $6.5 billion. ETH has shown some considerable volatility over the past few months, showing part of both an uptrend and downtrend.

Chart via

ETPs holding Bitcoin (BTC) as their underlying asset didn’t fare much better. They dropped almost 17 per cent to $14 billion from $16.8 billion in November. Those numbers actually outperformed Bitcoin, which dipped 20 per cent to about $16,500 in November compared to $20,600 the month prior. ETPs representing altcoins decreased 15 per cent and those with a basket of cryptocurrencies dropped by 17 per cent.

Fineqia drew the data for the AUM of ETFs and ETPs from public sources. These include 21Shares AG, Grayscale Investment, VanEck Associates, MorningStars, and TrackInSight SAS by Fineqia’s in-house research department.


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