Crypto Assets Under Management Surged 14% as Daily Trading Volumes Recorded 33% Increase in December

The digital asset market recorded massive highs on several fronts in Q4 2023 as institutional investors tightened their bullish grip on the market in anticipation of a spot Bitcoin (BTC) ETF approval in the United States.

A new report released by CCData on the fourth quarter performance of cryptocurrencies shows heightened bullish sentiment sparked by multiple factors leading to positive on-chain metrics.

As more funds entered the markets in December, daily trading volumes rose by 33.9% ending the year on a strong foot. A new 20-month daily trading volume was set at $659.5 million, the largest since January 2022 among cryptocurrency products.

“The surge in trading volumes suggests a vigorous trading environment and may indicate an escalating interest in digital asset products.” 

Institutional inflows in crypto funds in 2023 dominated the scene coming back from a horrid 2022 which saw asset prices plunge significantly ushering in the market winter. The rise in asset prints and market conditions saw most platforms record highs not seen in months and bulls continued to point north.

The final week of 2023 saw US$243m of inflows into digital asset ETPs, bringing 2023 total flows to US$2.2bn. pic.twitter.com/EtdHQWlu2K

— James Butterfill (@jbutterfill) January 3, 2024

Still, on the institutional front, ProShares BITO recorded a 28% spike in trading volumes to $345.5 million while Grayscale GBTC dominated the narratives, particularly after the firm’s court victory over the Securities and Exchange Commission (SEC) on its spot BTC ETF application posted a 67% increase to $197.8 million.

“Purpose Invest BTCC experienced modest growth, with volumes nudging up by 1.6% to $10.3 million. ProShares BITI, conversely, had a robust increase of nearly 49.8%, translating to approximately $33.8 million in average daily volume. Grayscale GDLC’s volume more than doubled, soaring by 64% to nearly $3 million,” the report added.

Crypto Assets Under Management Soars

AUM growth in the past 12 months was also characterized by strong favorite market conditions particularly increased transactional volumes and the spot ETF anticipation.

While the SEC is yet to approve a spot BTC ETF citing market manipulation concerns, new developments heightened the belief that an approval is imminent.

As a result, wealth managers recorded a significant spike in AUM across virtual asset products as Bitcoin and altcoins saw massive inflows. According to the report, AUM grew by 14% in December to $49.6 billion, a figure that has yet to be tapped since March 2022.

A 152% increase was posted throughout the year with Bitcoin products accounting for over $35 billion. Bitcoin’s product and price actions led to a wider asset increase as altcoins notched weekly inflows improving the entire decentralized finance (DeFi) ecosystem.

For most of the year, Solana (SOL) was described as an institutional investor favorite and recorded consecutive weekly inflows to end the year with a 54.9% increase.