Global crypto fund assets slump 37% in June to $21.6 billion, says report

livemint.com:

NEW DELHI: Assets under management (AUM) across digital asset investment products crashed 36.8% year-on-year to $21.6 billion as of 23 June, according to a report by digital asset data provider CryptoCompare.

In June, prices of bitcoin and ethereum fell 34.8% and 38.6%, as of 27 June, respectively, driven by uncertainties surrounding possible insolvency of crypto lending companies, including the crypto native fund, Three Arrows Capital.

Nervous sentiment around riskier assets continued to lead the narrative in the markets, with the US Federal Reserve raising interest rates by 0.75%, the largest hike since 1994. This hawkish stance reflected in the falling AUM of crypto products last month.

As per the report, June was a turbulent month for cryptocurrencies with the AUM of all major crypto investment product types falling sharply.

Exchange-traded funds (ETFs) experienced the largest drop, declining 52.0% to $1.31 billion. Trust products, which have a market share of 80.3%, fell 35.8% to $17.3 billion in June, while ETCs and ETNs fell 36.7% and 30.6% to $1.34 billion and $1.61 billion, respectively.

All four product types made new record lows with trust products recording the lowest AUM since December 2020, while ETCs AUM reached its lowest since October 2020. ETNs and ETFs followed, recording their lowest AUM since January 2021 and April 2021, respectively.

An investment trust is a closed-ended fund set up as a company, such that its shares can be bought and sold on an exchange or over the counter (OTC) market.

On the other hand, an exchange-traded note (ETN) is similar to an ETF, however, a major distinction between the two is that investors don’t own the underlying for an ETN.

An exchange-traded certificate (ETC) or