In Q4 2023, the digital asset market experienced substantial growth on various fronts, driven by heightened enthusiasm from institutional investors anticipating the approval of a spot Bitcoin (BTC) ETF in the United States.
CCData’s latest report on cryptocurrency performance in the fourth quarter reveals an intensified bullish sentiment, leading to positive on-chain metrics. As additional funds entered the markets in December, daily trading volumes surged by 33.9%, concluding the year on a robust note. Cryptocurrency products set a new 20-month daily trading volume record at $659.5 million, the highest since January 2022.
The significant uptick in trading volumes indicates a vibrant trading environment and suggests growing interest in digital asset products.
Institutional inflows into crypto funds in 2023 dominated the scene, marking a notable contrast to the challenging market conditions experienced in 2022 during the so-called market winter. The improved asset prices and market conditions led to platforms reaching highs not witnessed in months, with bullish trends prevailing.
On the institutional front, ProShares BITO saw a 28% spike in trading volumes, reaching $345.5 million. Grayscale GBTC garnered attention, particularly following the firm’s legal victory over the Securities and Exchange Commission (SEC) regarding its spot BTC ETF application, resulting in a 67% increase to $197.8 million.
Purpose Invest BTCC experienced modest growth, with volumes increasing by 1.6% to $10.3 million. In contrast, ProShares BITI witnessed robust growth, with an almost 49.8% increase, translating to approximately $33.8 million in average daily volume. Grayscale GDLC’s volume more than doubled, surging by 64% to nearly $3 million.
Assets Under Management (AUM) witnessed substantial growth in the past 12 months, driven by favorable market conditions, increased transactional volumes, and anticipation of the spot ETF approval. Despite the SEC’s pending decision, wealth managers observed a significant AUM spike across virtual asset products, reaching $49.6 billion, marking a 14% increase in December alone—a figure not reached since March 2022.
Throughout the year, AUM saw a remarkable 152% increase, with Bitcoin products contributing over $35 billion. Bitcoin’s performance influenced broader asset growth as altcoins attracted weekly inflows, enhancing the entire decentralized finance (DeFi) ecosystem.
Solana (SOL) emerged as an institutional investor favorite for most of the year, experiencing consecutive weekly inflows and concluding the year with a 54.9% increase.
