This year, a new financial product appeared on the cryptocurrency market - a crypto ETF, which makes it easier for large investors to buy top coins through well-known investment funds. In the winter, the world began to invest in Bitcoin ETFs, in the summer - in Ethereum ETFs. There are also talks about the prospects of widespread adoption of Solana ETFs2024. This trend can be seen in the Bitcoin price, which has risen by about a third since the beginning of this year - from 42.2 thousand US dollars to 59.1 thousand US dollars.Therefore, our editors decided to find out whether the popularity of crypto ETFs will help pull the price of famous coins out of the correction triggered by the fall in the value of cryptocurrencies and the US stock market in August.

Note: This material should not be considered financial or investment advice or an offer. Each crypto investor is personally responsible for decisions regarding investments in digital assets.

Did the cryptocurrency market recover in August

A serious correction in the top coins in the crypto market began in early August. According to Coinmarketcap, the tokens recorded a August the following decline:

• BTC fell to 49.8 thousand US dollars (early August – 64.8 thousand US dollars),
• ETH fell by $2226,000 (early August - $3196),
• SOL fell in price to $112,000 (early August - $170.8).

The overall decline in the Bitcoin price in the last summer month was 10.5%, Ether - 24%, Solana - 24.5%.

As we explained, a significant drop in the value of the top coins was caused by the Bank of Japan's decision to reduce the discount rate, as well as the release of weak quarterly reports by global technology companies. As a result, panic began among investors on theWorld Market:

• Shares of global tech giants plunged - Apple, Microsoft, Meta, etc.
• The yen-dollar pair experienced exchange rate fluctuations: the yen strengthened and the dollar fell.
• Investors have reconsidered their investment portfolios: They have withdrawn money from stocks and bought government bonds from various countries.

At the same time, despite the negative dynamics at the beginning of August, the price of these cryptocurrencies partially recovered. As of August 31, the coins cost:

• Bitcoin – 59.2 thousand US dollars,
• ether – $2524,
• solana - $137,

Experts believe that cryptocurrency attempts to return to pre-August levels are caused by two key factors:

1.Period after the halving.We would like to remind you that according to the technological model of digital gold, a halving of Bitcoin occurs every four years worldwide.After that, Bitcoin could rise to new historical highs within 6 months. This year, crypto investors expect such growth in October.

"This year's halving hasn't worked yet, so we can expect growth, but only after the election of the new US president, which will take place on June 5th. November will take place,” says financial advisor Mikhail Patsan.

2.In 2024, the crypto market will be greatly affected by the popularity of spot bitcoin ETF. The fact is that from time to time there is a significant capital inflow into cryptocurrencies and then the probability is greaterthat the cryptocurrency price is rising.

What investment amounts affect the dynamics of the coin exchange rate?Let's give an example.According to data Sosovalue came in the lastAugust week saw an outflow of $277 million from Bitcoin- ETF.But a week earlier, there was an inflow of money into the BTC ETF: institutions then invested around $506.7 million in this instrument.That is, in the last two weeks there has been a positive trend in investments in bitcoin-ETF.

In general, financial analyst Andrey Shevchishin is confident that the positive sentiment of the Bitcoin exchange rate this year will be most influenced not by the halving, but by the inflow of money from large investors in cryptocurrencies through ETF funds.

"Halving traditionally has an impact on the price of digital gold. However, the main factors influencing the crypto market were ETFs, stock market regulation and the sale of confiscated or frozen assets," notes the expert.

How crypto ETFs are changing the cryptocurrency market

The emergence of crypto ETFs allows us to move digital coins from the gray area into the legal realm, as the instrument has become a simple and familiar investment method for most, notes financial analyst Andrey Shevchishin.

Financial advisor Mikhail Patsan agrees that crypto ETFs have become very popular.For understanding, it provides the investment statistics for the second quarter of 2024.

"Institutional investors have significantly increased their investments in crypto ETFs, especially Bitcoin ETFs, as seen in the second quarter of 2024. Growth in institutional investments reached 27% during this period, a sign of investor confidence in the long-term potential of cryptocurrenciesis.The share of institutional investors in the total assets under management (AUM) for crypto ETFs rose from 21.4% to 24% in the second quarter alone, reflecting a significant increase in interest from major players.– explains the boy in a comment to Delo.ua.

What are the prospects for crypto ETFs in the cryptocurrency market

Andrey Shevchishin notes that the crypto ETF has not yet shown the full potential of the cryptocurrency market in the legal field. The fact is that when comparing the capitalization of crypto funds and traditional stock or bond funds, it becomes obvious that crypto is still an underdog. However, the crypto market is still at the beginning of its legalization. Investors' interest in digital coinsgrows.