Solana
April Crypto Report Praises Resilience of Solana (SOL) and Casts Doubt on Ethereum (ETH)
April Crypto Report Praises Resilience of Solana (SOL) and Casts Doubt on Ethereum (ETH)
2024-05-09 12:17:45 ET
Fineqia International
a digital asset and fintech investment firm, today
announcement
its April AUM Crypto ETPs report.
The company’s monthly analysis of global exchange-traded products (ETPs) with digital assets as underlying collateral revealed 64% growth in total assets under management (AUM) so far in 2024.
A difficult month of April for cryptos
However, on a monthly basis, total assets under management fell to $81 billion in April from $94.4 billion at the end of March, a decline of 14.2%.
The total market value of digital assets decreased by 18.8% to approximately $2.29 trillion in April, compared to $2.82 trillion the previous month.
According to the Fineqia study, ETPs representing a diversified basket of cryptocurrencies decreased by 9.5% in assets under management in April, to $2.8 billion, compared to $3.36 billion recorded at the end of March.
However, since the start of the year, assets under management of ETPs holding a basket of cryptocurrencies have increased by 24.2% from $2.25 billion at the start of 2024.
Too expensive thanks to BTC?
This could partly be attributed to the current relative cost of crypto ETPs. As Fineqia notes:
Even amid market declines, digital asset-backed financial products maintained a 24.5% premium to the digital asset market, consistent with the trend observed in the first quarter. Since the start of the year, ETPs holding digital assets have increased by 64% in assets under management, while the market capitalization of digital assets has increased by 29.2%. This highlights premium growth for ETPs of approximately 117% relative to the relative underlying.
Unsurprisingly, Fineqia attributes this increase in premiums mainly to the approval of Spot Bitcoin (BTC) ETFs in the United States, the trading of which began on January 11, boosting capital inflows into financial products featuring digital assets as assets underlying values throughout the first quarter.
Bundeep Singh Rangar, CEO of Fineqia, says Hong Kong has recently seen the launch of crypto ETFs, and the UK is set to follow soon. “It’s completely cooked now,” he said. “With the initial increase from the SEC [approval of BTC ETFs] once cooled, the loaves are ready and are served in ETF and ETN aisles around the world.
Fineqia’s report also highlighted that cryptocurrencies were doing particularly well and poorly in April.
Solana highlighted
In particular, Solana (SOL), which represents almost half of altcoins’ total assets under management, has been praised as “resilient”:
In April, ETPs with SOL as an underlying asset saw their assets under management decline by 31.4%, falling to $1.29 billion from the $1.87 billion recorded at the end of March. During the same period, SOL price fell 37.4%, falling to $127 from $203 recorded at the end of March. These statistics highlight that the premium seen in April in the assets under management of ETPs holding digital assets as underlyings relative to the broader value of the digital asset market can be primarily attributed to the resilience demonstrated by ETPs holding SOL.
Compare that to Bitcoin, which saw its price fall 13.6% to $60,150 in April, from $69,650 at the end of March. “Simultaneously,” according to Fineqia, “assets under management of ETPs with BTC as the underlying asset saw a decline of 13.2%, falling to $63.2 billion in April from $72.8 billion recorded at the end of March.
Ethereum sees a drop of almost 15%
Meanwhile, Ethereum (ETH) received a less positive report:
In April, Ethereum (ETH) saw a 14.9% drop in value, falling to $2,985 from $3,508 recorded at the end of March. During the same period, assets under management of ETH-denominated ETPs decreased by 16.4%, falling to $12 billion from the $14.3 billion recorded at the end of March. Year to date, ETPs holding ETH have shown an increase of 26.6%, while the price of ETH has increased by 31.1%. This highlights how market participants’ growing expectations of the SEC’s rejection of ETH Spot ETF approval in May led to a decrease in institutional exposure to ETH in favor of BTC.
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April Crypto Report Praises Resilience of Solana (SOL) and Casts Doubt on Ethereum (ETH)
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