How does AUM affect the valuation and performance of digital assets?

3 answers

• Dec 26, 2021 · 3 years ago
  AUM plays a significant role in determining the valuation and performance of digital assets. When the AUM of a digital asset increases, it often leads to an increase in its valuation. This is because a higher AUM indicates a higher demand for the asset, which can drive up its price. Additionally, a larger AUM can also attract more investors and increase liquidity, which can further enhance the performance of the asset.
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• Dec 26, 2021 · 3 years ago
  The impact of AUM on the valuation and performance of digital assets can be seen in the concept of market capitalization. Market capitalization is calculated by multiplying the price of a digital asset by its circulating supply. As the AUM of an asset increases, its price tends to rise, resulting in a higher market capitalization. This, in turn, can attract more investors and increase the overall performance of the asset.
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• Dec 26, 2021 · 3 years ago
  According to a study conducted by BYDFi, there is a positive correlation between AUM and the valuation and performance of digital assets. The study found that as the AUM of a digital asset increases, its valuation tends to rise, and it also experiences better performance in terms of price appreciation and trading volume. This suggests that investors consider AUM as an important factor when evaluating and investing in digital assets.
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