Crypto Assets Under Management Surge 36.7% in January as Markets Recover, But Grayscale Situation Remains “Delicate”
Total assets under management (AUM) for digital asset investment products surged a whopping 36.8% to $19.7 billion in January, its highest level since May 2022, CryptoCompare said in its latest monthly Digital Asset Management review report. According to the crypto intelligence firm, “bullish sentiment was driven by liquidated short positions and a favorable macro environment, reflected in the most recent CPI announcement, which saw Bitcoin's price reach $23,000; its highest level since August 2022”.
However, CryptoCompare noted that AUM is still 38.7% below its level in January 2022 “due to a difficult year for Bitcoin, the wider cryptocurrency market, and traditional assets”. It is widely agreed amongst analysts that the main trigger of 2022’s risk asset and crypto bear markets was a surprisingly aggressive hawkish shift in the policy stance of the US Federal Reserve and other major central banks in order to clamp down on a stronger-than-expected surge in global price pressures.
Despite the January revival in crypto market sentiment that has also resulted in a rebound on crypto investment product AUM, CryptoCompare noted that the situation relating to Grayscale’s Bitcoin Trust (GBTC) remains delicate. While GBTC remains the dominant Bitcoin investment trust product in terms of AUM, with a market share of 69.3%, CryptoCompare noted that “the discount associated with Grayscale’s GBTC Trust has only slightly narrowed” in January.
The GBTC discount refers to the percentage that GBTC shares are trading below their net asset value. As of the 31st of January, the GBTC discount was a staggering 42.29%, only slightly above record lows printed last December in the 48% area. CryptoCompare explains that “the situation remains
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