AUM in Сrypto
AUM is the total market value of the investments controlled by a company or an individual on behalf of the clients.
Table of Contents:
What is AUM in Crypto?
Assets under management (AUM) stands for the total market value of funds under the control of financial institutions such as mutual investment funds, venture firms, or trading companies.
AUM is classified into categories based on its volume:
- Small projects – funds typically have an AUM of about $1 million or less. They often focus on niche markets or emerging crypto technologies.
- Large-scale projects – funds with AUM over $1 billion. These funds tend to have a significant market presence and are often capable of executing large trades without significant market impact.
AUM is a significant indicator in the cryptocurrency ecosystem because it reflects the volume, reputation, and efficiency of investment funds and financial institutions. Understanding AUM and its influence on the market helps investors make informed and effective decisions.
How to Calculate AUM in Crypto?
The process of calculating AUM in the crypto world is similar to traditional finance, but it takes into account the unique nature of digital assets. Thus, AUM is calculated by summing up the total value of all assets under management within a specific fund.
AUM Formula:
AUM = total value of each type of assets
This formula implies that AUM is the sum of the current market value of each type of asset including BTC, altcoins, stablecoins, DeFi tokens, and NFT, held by the fund, multiplied by the amount of that asset owned by the fund. For example, if a fund holds 100 BTC valued at $30,000 each, the BTC portion of AUM would be $3,000,000.
AUM fluctuates regularly as the market prices of digital assets change in real time based on trading activity across various exchanges.
AUM is also influenced by factors like:
- Investor deposits
- Withdrawals
- Market-driven gains or losses
For instance, if an investor deposits a significant amount of digital assets into a fund, the fund’s AUM will increase. Similarly, a decrease in the value of the assets will cause a reduction in the AUM.
Why AUM Matters in Crypto
Assets under management play their role in the cryptocurrency ecosystem:
- Evaluation of investment funds. AUM provides insights into the scale and influence of an investment fund. Funds with large AUM can execute high-value trades with minimal market disruption, making them more attractive to investors.
- Reputation and credibility. AUM reflects the sustainability and efficiency of an investment fund. Large-scale funds are often viewed as more authoritative, with a track record of successful investments. It helps attract new investors and capital.
- Liquidity and stability. Higher AUM is often associated with greater liquidity, which allows funds to efficiently manage investment portfolios and meet withdrawal demands without significant market impact.
How Is AUM Used in Crypto?
Investment funds
Investors and analysts use AUM as a measure of fund performance. A growing AUM indicates successful investment strategies and client trust.
Exchanges and trading platforms
AUM also applies to cryptocurrency exchanges, representing the total value of assets held on the platform.
A higher AUM suggests:
- Greater investor trust and market credibility
- Higher liquidity for smoother trading
- A larger user base and market presence
AUM Growth Trends in the Crypto Industry
Since 2018, Assets Under Management (AUM) in the cryptocurrency sector has experienced steady growth. By the end of 2021, AUM in the sphere surged to nearly $63 billion, driven largely by growing institutional interest.
As of early 2025, cryptocurrency investments have reached new heights, with total inflows hitting $44.2 billion, a fourfold increase from 2021. Bitcoin led the charge with $38 billion, marking a 320% increase from 2021, while Ethereum saw a remarkable 60-fold rise in inflows compared to 2023. These impressive figures reflect rising investor confidence and the expanding role of cryptocurrencies in diversified portfolios.
Understanding AUM and its influence on the market helps investors make informed decisions on where to invest. Additionally, for businesses that use crypto solutions for transaction processing, knowledge of market trends, including AUM growth helps assess industry stability and future opportunities.