Mr. Bundeep Rangar reports

GLOBAL DIGITAL ASSET-BASED EXCHANGE TRADED PRODUCTS AUM REACHES ALL TIME HIGH $80.5 BN; 55 per cent SURGE IN FEB.

Fineqia International Inc.'s analysis of worldwide exchange-traded products (ETPs) with digital assets as underlying collateral revealed assets under management (AUM) reached a record $80.5-billion (U.S.), a 55-per-cent increase from $52-billion (U.S.) during February. All monetary amounts are in United States dollars.

This 55-per-cent rise in February was nearly 50 per cent higher than the increase in the value of underlying crypto assets, which grew slower at 37 per cent to about $2.37-trillion from $1.73-trillion. The premium is largely credited to the approval of BTC Spot ETFs in the United States, which began trading on Jan. 11. Increased capital inflows drove ETPs to this new high that exceeded the previous top AUM (assets under management) of $58.5-billion reached at the end of 2021 by 38 per cent.

"If you can't beat 'em, join 'em, is the mantra," said Fineqia's chief executive officer Bundeep Singh Rangar. "Old school fund managers risk ignoring bitcoin's unprecedented returns over the past 15 years at their own peril. The legitimization of the coin via spot ETFs, likely easing of interest rates and reduced token supply are all likely to support its rising price."

The New Liberty Standard Exchange recorded the first exchange of bitcoin in late 2009 for $0.0099 per bitcoin (about one-10th of one cent). It currently trades for about $67,000.

Ten new BTC Spot ETFs featuring issuers such as BlackRock, 21shares and Grayscale attracted $7.4-billion in net inflows since their inception. Grayscale Bitcoin ETF (GBTC)'s led the pack with approximately $26.5-billion in AUM. It previously traded as a trust before being converted into an ETF when it experienced $8.9-billion in outflows offsetting the total $16.3-billion inflows into the new ETFs.

BlackRock's Bitcoin ETF (IBIT) garnered $10-billion in AUM over the two months to March 1, the fastest ETF ever to reach this milestone. About $8-billion was attributed to in net inflows and $2.3-billion to Bitcoin's price upswing. That implied an average daily AUM increase of almost $300-million over 35 trading days.

By contrast, SPDR Gold Shares (GLD), the first gold ETF that began trading in the U.S. in November, 2004, took more than two years to reach $10-billion in AUM. BTC Spot ETFs seem to be driving up the price of bitcoin that's increasingly viewed by investors as digital gold, unlike physical gold whose price is connected with central bank reserves and industrial demand.

"The institutional race is on and it's driving demand," said Fineqia's chief executive officer Mr. Rangar. "The high uptake of ETFs is causing its issuers to soak up available BTC supply in the market, driving up prices. And it looks like there might still be some more room to stretch along the price elasticity curve."

In February, the price of BTC increased by 41.4 per cent, rising to $61,250 from $43,300 at the end of January. During the same time, the AUM of ETPs with BTC as the underlying asset saw a 59.5-per-cent increase, to $60.6-billion from $38-billion recorded at the end of Jan. BTC-backed ETPs make up about 4.9 per cent of the total BTC supply. The 10 newly introduced BTC Spot ETFs, holding 3.9 per cent of the supply that's valued at $48.2-billion, highlight their substantial influence on the recent market uptrend.

During February, ethereum (ETH) rose 46.9 per cent in value to $3,473 from $2,365 recorded at the end of January. In the same period, ETH-denominated ETPs AUM increased 46 per cent to $14-billion from $9.6-billion on Jan. 31. It is important to note that seven issuers applied for an ETH Spot ETF and the U.S. Securities and Exchange Commission (SEC) postponed decisions on Blackrock and Fidelity's filings. The SEC must decide by the end of May, 2024, as three filings have a final deadline that week.

ETPs representing a diversified basket of cryptocurrencies increased 41.4 per cent in AUM during February to $3.01-billion, from $2.17-billion recorded at the end of January.

ETPs representing an index of alternative coins increased by 27.1 per cent in January to $2.83-billion from $2.22-billion recorded at the beginning of the year. Solana (SOL) remains the dominant force in this index, comprising nearly half of the alternative coins AUM. ETPs with SOL as the underlying asset experienced a 25.3-per-cent increase in AUM, to $1.26-billion from $1.01-billion recorded at the end of January.

ETPs include exchange-traded funds (ETFs) and exchange-traded notes (ETNs). Fineqia Research's AUM calculation factors in the launch or closure of ETPs during any stated period. The number of tracked ETPs stood at 180 as of the end of February.

About Fineqia International Inc.

Fineqia is a digital asset business that builds and targets investments in early- and growth-stage technology companies that will be part of the next generation of the Internet.

We seek Safe Harbor.