• Investment products for major altcoins saw substantial growth, contributing to a 1.14 percent increase in total AUM to $33.7B. 
  • Bitcoin (BTC) exhibits resilience, surging 6.9 percent in Q2 2023, outperforming the crypto market, but its dominance declines as altcoins rise.

Investment products specializing in three major alternative cryptocurrencies, namely Stellar (XLM), XRP, and Solana (SOL), experienced substantial inflows this month, resulting in significant growth in their assets under management. Although the primary surge in assets under management came from Bitcoin (BTC) products. The positive performance of these altcoins contributed to a minor increase of 1.14 percent in total assets under management, bringing it to $33.7 billion. This marks the second consecutive monthly growth, with a remarkable year-to-date growth rate of 71.5 percent.

Focusing on XLM, the products saw an impressive surge of 62.7 percent, reaching $17.3 million in assets under management. The boost was driven by a considerable uptick in Grayscale’s XLM product, which recorded a premium exceeding 330 percent. Likewise, XRP and SOL-based products showed strong growth, as the recent SEC lawsuit verdict ruled that XRP is not necessarily a security.

XRP products experienced a 33.2 percent increase, raising its assets under management to $65.7 million. On the other hand, SOL-based products climbed 55.7 percent, reaching $87.8 million in assets under management.

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According to the report, the United States continues to maintain a dominant position in the assets under management (AUM) of cryptocurrency investment products. The recent filings for a Bitcoin exchange-traded fund (ETF) by major financial players like BlackRock and Fidelity sparked a renewed interest in these products, effectively alleviating concerns related to regulatory scrutiny that previously affected the market. As a result, the US now holds an impressive $26.3 billion in AUM, representing a substantial market share of 78 percent.

However, if we exclude Grayscale’s significant influence, the landscape of digital assets appears quite different. In this scenario, Europe takes the lead in terms of AUM. Particularly, countries like Sweden, Switzerland, and Germany emerge as pioneers in digital asset products, collectively holding $3.9 billion in AUM as of July, contributing to 11.5 percent of the global total.

A Decline in Bitcoin Dominance Across Major Exchanges

In recent months, Bitcoin (BTC) has shown remarkable resilience, solidifying its position as the dominant player in the cryptocurrency market.

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According to a Coingecko report for Q2 2023, published on July 18th, Bitcoin maintained its positive momentum from Q1 and experienced further growth during Q2. The price of BTC surged by 6.9%, rising from $28,517 to $30,481. This substantial increase outperformed the overall crypto market cap, which only saw a marginal rise of 0.14%, reaching $1.240 trillion.

An important milestone in Bitcoin’s journey occurred when BlackRock announced its filing for a spot Bitcoin ETF on June 15th, leading to BTC reaching a yearly high of $30,694.

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However, a recent report by Kaiko Research revealed that Bitcoin’s dominance, which represents its relative percentage of the total market capitalization, has declined by 8 percent across the 25 largest exchanges this month. As per the report, Bitcoin’s dominance is now at a multi-month low, standing at 27 percent across major exchanges, a level not seen since April.

This drop in dominance can be attributed to the surge in altcoins, which gained momentum after Ripple’s partial court victory. The $XRP token displayed strong investor confidence, with an impressive total trading volume of approximately $25 billion since July 13th, leading to an “alt season” celebration among altcoin investors.

Despite this positive trend for $XRP, a Kaiko analyst, Dessislava Ianeva, warned against excessive market optimism at this early stage. The future of Ripple remains uncertain as the SEC intends to contest the recent court decision.


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