Fineqia International Inc (CSE:FNQ, OTC:FNQQF) senior associate Matteo Greco talked with Proactive about the continued growth in digital asset ETPs, which reached a record $218 billion in assets under management last month.
Greco explained the key factors behind this trend, citing the approval of spot Bitcoin ETFs in the US as a significant catalyst, combined with the overall strength of the crypto market since early 2024.
Proactive: Digital asset ETPs hit a record $218 billion in assets under management last month. What’s driving the sustained institutional appetite for crypto exposure?
Matteo Greco: Yes, new all-time high for crypto ETPs. It’s the third month in a row with total AUM above $200 billion. This growth is just steady and continuous and started in January 2024, post the spot Bitcoin ETF approval in the US.
Two factors are playing together: one is the strength of the crypto market in the past couple of years, which drove demand from both retail and institutional investors. The second is the approval in the US, which paved the way for much broader investor exposure. These combined have driven strong AUM growth over the past year.
Bitcoin ETPs saw renewed inflows in September after a brief dip. What does that tell you about investor sentiment towards Bitcoin at current price levels?
It definitely shows strong and organic demand. Last month, there were small outflows from Bitcoin ETP products — the first on a monthly basis since March this year. But the fact that the following month we saw renewed inflows suggests it was just a brief pause after months of accumulation.
In September, Bitcoin’s price rose over 5%, but AUM rose more than 6% with a 16% premium. This shows net inflows and continued institutional demand since the beginning of 2024.
Ethereum ETPs held steady even as the Ethereum price pulled back. Why do you think institutional investors are continuing to add exposure to Ethereum?
It’s a repeat of what happened in the crypto space years ago. Bitcoin financial products have been around longer in Europe and Canada, and recently in the US. That credibility gave investors confidence to expand their exposure beyond Bitcoin.
With Ethereum, after a slow start post spot approval in the US, we’ve seen strong demand in Q2 and Q3 this year. This shows broader investor confidence in the asset class, with many expanding from Bitcoin to Ethereum structured products.
Altcoin ETPs surged nearly 37% in September. What’s behind this acceleration, and which assets are leading that growth?
It’s part of the typical trend in crypto. Ethereum tends to lead altcoin interest. As Ethereum demand grew over the past six months, that helped drive demand for other altcoins.
In structured products, Solana leads in number of issuers and AUM. In terms of asset performance, Binance Coin (BNB) has been the strongest driver. So those are the main two assets leading the altcoin ETP growth.
Looking ahead, do you expect the momentum in digital asset ETPs to continue through the fourth quarter, or are there risks investors should watch for?
Markets are always dynamic and volatile, so it’s tough to predict. But historical data from the past couple of years shows no real pause in demand. Some months are stronger than others, but overall, the trend is positive.
Even during market downturns — for example, a 30% drop in Bitcoin at the start of the year — we didn’t see strong outflows. These products attract longer-term investors, who are less price sensitive. Of course, in a bear market I expect some outflows, but the overall trend is clear: demand is rising and likely to continue rising in the coming years.
Quotes have been lightly edited for style and clarity
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