Fineqia analysis shows crypto ETP demand defies market drop - ICYMI

Fineqia International Inc (CSE:FNQ) Senior Associate Matteo Greco talked with Proactive about how institutional demand for regulated crypto investment products is holding steady, even amid broader market volatility.

Greco noted that although the overall crypto market value declined by 5.5% in October, crypto ETP assets only dipped by 2.5%, highlighting a shift in appetite among traditional finance players.

Bitcoin ETPs, in particular, have held their ground and now account for around 7% of total Bitcoin supply. According to Greco, the approval of spot Bitcoin ETFs in the U.S. in early 2024 opened access for larger capital bases, significantly boosting institutional involvement. He also mentioned treasury plays and unlisted funds as additional vehicles contributing to institutional holdings.

On Ethereum, Greco explained that its ETP assets saw nearly 90% growth this year, as investors seek to diversify after gains in Bitcoin.

He also addressed the recent trend of investors shifting from altcoin-specific products toward basket ETPs that include Bitcoin and Ethereum, citing geopolitical and macroeconomic uncertainties as driving a "flight to quality."

Proactive: Hello, you're watching Proactive. I'm joined by Matteo Greco, Senior Associate at Fineqia International Inc. Matteo, very good to speak with you. Despite a 5.5% fall in overall crypto market value, ETP assets only dipped by 2.5% in October. What does this tell us about institutional appetite for regulated crypto exposure right now?

Matteo Greco: Hi. First of all, as always, thanks for having me. Jumping into your question — I think it’s a trend we've been seeing for almost two years now, since early 2024 with Bitcoin spot ETF approval. We’ve been on an upward trajectory overall. But even in situations like last month, where the market price action is not really as good and prices are falling, the demand for crypto ETP products still remains somewhat stronger. Obviously, there is still an impact, but it remains stronger compared to the underlying itself.

I think the big difference lies in the cohort of investors these products are aimed at versus crypto-native investors. There's a lot more institutional interest in ETPs. Even when it comes to retail, people used to buying traditional assets like the S&P 500 or Nasdaq tend to have a much longer-term vision. The price sensitivity of crypto-native investors is much higher — it always has been. So I feel this big discrepancy is really due to the different types of investors participating in each subset of the market.

Bitcoin ETPs held steady even as the price dropped, now accounting for roughly 7% of total Bitcoin supply. What's driving this sustained investor confidence and inflow into BTC products?

I believe we can refer back to what I just said. Bitcoin is probably the best example of that. There is definitely a lot of institutional interest in Bitcoin. We've had Bitcoin ETPs in Europe for quite a long time now, but the early 2024 approval in the U.S. was a game changer. As we know, the bigger capital pools are in North America, especially the U.S. Now there's a possibility for a wealthy cohort to get direct exposure to these assets, which wasn’t possible before.

In addition to that, we've also seen a lot of digital asset treasury plays this year. If we account not only for ETPs but also for these and other unlisted funds, the supply held by institutions would be much higher. This is a reference point for how strong the investor appetite has been from the traditional finance and institutional side. When there's strong demand from people with high capital to invest, the demand will naturally be extremely strong.

Moving on to Ethereum, Ethereum ETPs saw nearly 90% growth in assets this year despite price weakness. What's behind this institutional accumulation, and how do you see Ethereum's role evolving in digital asset portfolios?

I believe Ethereum is following the same trajectory it followed in the crypto-native markets a few years ago. The Bitcoin ETP ETFs have gained a lot of traction and credibility, and investors made a lot of profit because the price action has been really strong over the past couple of years.

What we’re witnessing now is that in recent months, investors want more exposure to the asset class — more exposure to the crypto market. The way to do that is either by investing more into Bitcoin-related products or diversifying into other crypto assets. Ethereum has been the second most capitalised asset for years and is the most traded after BTC on the traditional finance side.

So, once there was a big wave of BTC investment, there was a rotation and increased demand for Ethereum. This has led to increasing demand for Ethereum and has put it in a much stronger position in terms of traditional finance investor demand.

Altcoin ETPs are pulling back while basket products are rising. Is that just a flight to quality? How are investors adjusting their crypto exposure amid volatility? What trends should we be watching heading into 2026?

We are seeing a lot of uncertainty in macroeconomic and geopolitical conditions. This usually impacts risk-on assets. Crypto tends to be perceived as a less safe asset class, but Bitcoin — and partially Ethereum — are gaining more credibility in how people perceive them, even during downturns.

When it comes to other altcoins with lower liquidity, trading volume, and capitalisation, we’re not there yet. From both traditional finance and crypto-native sides, we’re seeing risk-off behaviour. Investors are trying to apply a flight-to-quality approach and limit exposure — some shift to stocks or bonds, while others look for safer crypto exposure.

That’s why we've seen high demand for Bitcoin and Ethereum. Basket products are outperforming altcoins in demand recently because they often contain a significant portion of Bitcoin and Ethereum in their composition. These are now preferred over single altcoins, which are not perceived as safe in the current environment.

As for 2026, there’s still a lot to unfold. The uncertainty is very high, especially coming from the U.S. — with tariffs and geopolitical tensions. We’ll have to see how things play out before we can make predictions for next year.

Quotes have been lightly edited for clarity and style