As of 9th July 2024, the net asset value within the spot Bitcoin ETF sector was approximately $50 billion, down from the highest of $54.37 billion in the 30-day data. In this article, we will explain the meaning of net assets or AUM, explore the recent decrease in this metric, and explain the reason behind the decline.
What is AUM in Spot Bitcoin ETFs?
Many beginners within the crypto industry might be lost as to what is the meaning of AUM. It is simply the short form of assets under management and is a metric used to measure the size of a Bitcoin ETF. It represents the total value of assets that the ETF manages on behalf of its investors.
Generally, the most popular ETFs are those with the highest AUM. According to data from The Block, the assets under management (AUM) for spot bitcoin ETFs, include BlackRock (IBIT), the Grayscale Bitcoin Trust (GBTC), Fidelity (FBTC), Ark Invest/21Shares (ARKB), Bitwise (BITB), Franklin (EZBC), Invesco/Galaxy (BTCO), VanEck (HODL), Valkyrie (BRRR), WisdomTree (BTCW) and Hashdex (DEFI).
Bitcoin AUM (Net Assets) Drop to $49 Billion
In March, there was a consistent decrease in spot Bitcoin net assets or AUM. Apparently, the whole ETF venture started with $27 million worth of net assets under management as of 27th January 2024. However, this figure hit an incredible $61 billion on 18th March. But on this day, it is pretty important to point out that spot Bitcoin ETFs had an outflow of around $2 billion, with only an inflow of $1.12 billion.
The following week, after recording this incredible feat, the value of spot Bitcoin AUM decreased to around $53 billion. One of the attempts spot Bitcoin ETFs made at reaching the $61 billion level again was on April 1st, when it hit a massive $58 billion AUM. Also, on this day, it had a $1.20 billion inflow with an $813 million outflow.
Throughout June and July, spot Bitcoin ETF AUM remained between $54 billion and $49 billion. According to the 30-day data from CoinMarketCap, the highest AUM within the 20 days was on June 11th, with $54.37 billion worth of assets under management.
Why the Decrease in AUM in Spot Bitcoin ETFs?
The decrease in spot Bitcoin ETF net assets is caused by many factors, including market sentiment, volatility, and consistent fund outflows that contribute to the current situation. Moreover, negative sentiment in the broader cryptocurrency market led to investors selling off their holdings, resulting in a decrease in AUM.
Furthermore, price volatility, especially significant drops in Bitcoin’s value, has a direct impact on the value of AUM. Another thing to point out is the poor performance of Bitcoin and Bitcoin funds, with Grayscale running up large outflows, which led to a decrease in net assets under management.
Conclusion
Over the past few months, one of the trends within the spot Bitcoin ETF sector was the consistent decrease of the net assets. This is also known as AUM (asset under management) and is currently in a downturn since hitting peak numbers of $61 billion back in March 2024. Certain factors contribute to this massive depreciation of these metrics, and this includes poor performance from the broader crypto market, negative sentiment, and consistent outflows.
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