The fact that the cryptocurrency market has been very uncertain and reticent in recent months is also noticeable among institutional investors. Bitcoin (BTC) investment products continue to shrink, even in August. Despite this, ethereum (ETH) products actually saw small growth last month.
AUM Bitcoin Funds Drops, Ethereum Grows
CryptoCompare writes in a new report that ether investment products grew 2.63% last month to $6.81 billion in assets under management (AUM), or assets under management. Bitcoin products, however, saw a 7.16% drop in August to $17.4 billion.
The total AUM of all crypto funds fell 4% in August to $25.8 billion. Bitcoin is primarily responsible for the decline. As can be seen below, the AUM of these types of funds has been in a downward trend since October 2021:
/1 Our latest Digital Asset Management Review #DAMR is live!
As the narrative surrounding the merge continues to gain momentum, so do #Ether investment products! pic.twitter.com/PjXG8MK614
— CryptoCompare (@CryptoCompare) August 30, 2022
Same trend with trading volume
This trend was also visible in August in terms of trading volume. For example, the volume of the well-known bitcoin fund of Grayscale, the largest crypto asset manager in the world, fell sharply. Grayscale Bitcoin Trust (GBTC) volume fell 24.4% in August.
On the other hand, the volume of Grayscale’s ether fund increased. Grayscale Ethereum Trust (ETHE) volume rose 23.2% last month.
Is the upcoming Ethereum merge the reason?
The difference between the BTC and ETH funds is probably due to the upcoming mergesays Crypto Compare.
The merge is the merger of the current Ethereum network with the new blockchain. With this, Ethereum makes the switch from a proof of work (PoW) protocol to a proof of stake (PoS) protocol and will essentially be Ethereum 2.0.
It may even cause investors to switch from bitcoin products to ether products in the short term:
“No Bitcoin product covered in this report saw AUM or volume gains in the month of August. We could see interest in Bitcoin fade in the near term as Ethereum-based products draw attention with the highly anticipated merge on the horizon.”
