Bitcoin's Bearish September Has Kneecapped Crypto ETP Activity: Report

Bitcoin's price woes this month likely put investors off from purchasing crypto ETPs, pushing volumes into a nosedive.

AccessTimeIconSep 25, 2020 at 2:25 p.m. UTC
Updated Sep 14, 2021 at 10:00 a.m. UTC

Bitcoin's bearish price performance this month has prompted investors to pull out of some crypto derivatives products, with trading volumes taking a nosedive as a result.

  • A CryptoCompare report published Thursday shows volumes for cryptocurrency-based exchange-traded-products (ETPs) have fallen to a fraction of what they were in August.
  • Average daily volumes have fallen 75% from $186.5 million in mid-August to just $48 million by the middle of September, the firm wrote.
CoinDesk - Unknown

  • The slump was experienced across the board with product providers in both Europe and North America, including Deutsche Boerse XETRA, feeling the pinch.
  • August had been a record month for crypto derivatives generally, as CoinDesk reported at the time.
  • CryptoCompare's report doesn't include volumes from products that run on unregulated derivative providers, such as BitMEX or Binance.
CoinDesk - Unknown

  • Market leader Grayscale saw volumes for its Bitcoin Trust fall to just $40 million a day (pictured above).
  • Its Ethereum and Ethereum Classic products have lost nearly 65% of their value since June, something CryptoCompare puts down to waning interest among investors.
  • Grayscale is part of Digital Currency Group, CoinDesk's parent company.
  • Crypto derivatives track the price performance of selected digital assets, usually bitcoin, through a product that's tradeable on regulated stock exchanges.
  • As such, they are popular with investors who want to gain exposure to the digital asset market through a traditional instrument.
  • Constantine Tsavliris, CryptoCompare's head of research, told CoinDesk investors may have been put off as bearish market sentiment grew.
  • In the first week of September, bitcoin fell from $12,000 to $10,000, but has since recovered to trade around $10,613 at press time, according to CoinDesk bitcoin data.
  • But negative feelings still pervade the market. The Fear and Greed Index, a consolidated sentiment tool for digital assets, is currently at 46, suggesting traders are still mildly bearish.
  • "ETP investors generally invest long-term, and therefore the recent drop in price combined with a generally bearish market has likely encouraged more cautious trading activity," Tsavliris said.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.