Flurry Of Funds Bet Big On Bruised Bitcoin's Allure
ndtv.comCryptoverse: Flurry of funds bet on bruised bitcoin's allure
A growing number of funds are betting on the long-term appeal of bitcoin and ether, a gritty gambit in the depths of a crypto winter.
Unfazed by a collapse in prices over the past 11 months, investment firms have unleashed a flurry of exchange-traded funds, anticipating that elite cryptocurrencies and their underlying technology will eventually prevail.
Of more than 180 total active crypto exchange traded products (ETPs) and trust products globally, half have launched since the bitcoin bear market started, Morgan Stanley said in a note published this month. The proliferation came even as the total value of assets in the market slumped 70 per cent to $24 billion in that period as crypto prices tanked.
About 95 per cent of those 180 funds are focused on the top two coins, bitcoin and ether, Morgan Stanley said.
"Naturally when the market is slower, prices are lower, people have lost money, the intensity of the appetite does diminish," said Chen Arad, co-founder of crypto risk monitoring firm Solidus Labs. "But it's not the case in the long run. As a whole, I don't think anyone is giving up."
The attraction of ETPs is that they provide exposure to digital assets on a regulated stock exchange, so retail and institutional investors don't have to worry about securely storing their crypto and eluding hacks and heists.
In terms of money, cryptocurrency investment products have attracted about $453 million in net inflows this year with much of it going into bitcoin and investment vehicles that include the biggest cryptocurrencies, according to a report from digital asset manager Coinshares.
"There is more asset allocation towards baskets that combine the top five or 10 crypto
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