In a recent whirlwind of bullish momentum, the digital asset market has witnessed an impressive surge, catapulting cryptocurrency prices to heights not seen in over 18 months. Beyond the price rally, decentralized financ (DeFi) activities are also experiencing a surge, marked by substantial volumes and increased staking as investors eagerly seek rewards before the year-end.
A comprehensive market report from CCData, an on-chain analytics firm, sheds light on the remarkable growth in Assets Under Management (AUM) related to virtual asset products, weekly inflows, and a renewed appetite among firms and investors for a spot Bitcoin (BTC) ETF.
The data reveals that institutional clients' interest in DeFi products sustained its momentum throughout October, reaching $43.3 billion by the end of November. At present, this figure has surged beyond the $45 billion mark, indicating a robust and expanding market.
Despite the current bullish drive, the year-to-date growth (YTD) in crypto asset AUM stands at an impressive 120%. However, this is still below the peak reached in 2021 when AUM surpassed $74 billion.
A notable finding in the research is the daily average trading volume, which experienced a substantial 35.3% increase from the previous month, reaching $481 million.
The bull run of 2021 faced challenges due to rapid inflation in traditional markets, leading to tightening measures, investor withdrawals from risky assets, and low trader sentiments caused by industry collapses.
The recent surge in AUM is attributed to various factors, including growing investor confidence, heightened anticipation for a spot BTC ETF, increased participation in the ETF process, and mounting pressure on the Securities and Exchange Commission (SEC).
Strategic moves by key firms involved in the ETF process have marked the past month. Companies such as Fidelity, WisdomTree, BlackRock, Grayscale, and others engaged with the financial regulator, either amending filings or discussing future prospects and receiving feedback from the Commission.
While the SEC has yet to approve any spot Bitcoin ETF applications, concerns about possible market manipulation persist. Nevertheless, many wealth managers are positioning themselves for an imminent approval, anticipating a new liquidity cycle in the market.
Bitcoin's uphill journey has played a pivotal role in the rise of AUM, maintaining its position as the top choice for investment product inflows. With Bitcoin currently trading at over $44,000, marking a 160% increase this year, investment products have recorded a 12% growth in November, totaling slightly over $31.8 billion.
In addition to Bitcoin's dominance, Ethereum (ETH) products experienced a surge last month, rebounding from previous losses. Altcoin products, led by Ethereum, grew by 12%, reaching $1.75 billion. Solana (SOL) also made significant strides, with its products spiking by 99%, pushing AUM to $424 million. The thriving crypto market continues to evolve, promising a dynamic landscape for investors and enthusiasts alike.
