Fineqia International's Matteo Greco discusses crypto market outlook

Fineqia senior associate Matteo Greco said short-term crypto prices have been trending downward while demand for crypto ETPs has remained relatively stable, with Bitcoin ETPs accounting for roughly 80% of crypto ETP AUM and Ethereum ETPs posting stronger inflows in early 2025. He attributes ETP resilience to longer investor horizons and slower creation/redemption mechanics, notes ETPs remain a small fraction of overall crypto market capitalization, and highlights ongoing product evolution toward yield/staking, DeFi ETPs and potential tokenisation.

Analysis

Market structure: The immediate winners are regulated ETP issuers, custodians and staking/yield product providers who capture stable inflows and recurring fees; Bitcoin ETPs hold ~80% of crypto ETP AUM, concentrating distribution and pricing power in a handful of issuers. Native spot exchanges, high-frequency liquidity providers and small-cap alt markets are relative losers because longer creation/redemption cycles and institutional custody reduce on‑chain trading turnover; estimate ETPs still represent only ~2–4% of total crypto market cap, so systemic price support is modest but non‑negligible.

Risk assessment: Tail risks include regulatory delisting or staking bans (low-to-medium prob, high impact), custodial insolvency or a large ETP redemption wave that forces on‑chain liquidations; these risks can materialize immediately (days) or over quarters if policy shifts. Hidden dependencies include basis distortions between ETF/ETP share and spot markets, collateral rehypothecation in yield products, and counterparty exposure to market makers; key catalysts are additional spot ETH ETF approvals, major macro risk events (Fed pivot or risk‑off), and concentrated issuer failures.

Trade implications: Favor regulated infra and issuer equities (small tactical overweight) and structured hedges: buy selective issuer exposure and use options to hedge underlying crypto beta. Size and timing matter — short‑dated hedges for immediate volatility, medium term directional for product adoption (3–12 months), and long term for tokenization/staking secular growth (12–36 months).

Contrarian angles: Consensus underestimates speed at which staking/yield ETPs can scale AUM (could double for ETH-staking products in 12 months if regulatory clarity continues), which would amplify fees to custody/staking vendors. Conversely, the market may be overpricing stability from ETPs — concentrated issuer flows create fragility if a single large AP redeems; this can produce sharper drawdowns in native markets than headline ETP steadiness implies.

Key Decisions for Investors

• Establish a 2–3% net long position in FNQQF (ticker FNQQF) for 3–6 months to capture swap/ETP distribution growth and tokenisation initiatives; set a profit target of +30% and a hard stop at -25% (reassess on material regulatory notices within 30 days).
• Add a 1–2% long position in Coinbase (COIN) or similar public custodial/exchange issuer with staking revenue exposure for a 6–12 month horizon; trim on a +40% move or if monthly staking revenues fail to grow by >10% QoQ.
• Implement a hedge: buy 3‑month 25‑delta puts on BTC futures (Deribit/CME) sized to cover 50% of crypto directional exposure to protect against a >20% drawdown over the next 90 days; simultaneously sell 30‑ to 60‑day elevated IV strangles tactically if realized vol normalizes to monetize premium.
• Initiate a relative‑value pair: long spot ETH exposure (via a regulated ETH ETP or spot purchase) and short a basket of small‑cap altcoins (top 50 ex‑ETH by market cap) with equal notionals for 3–9 months to capture potential ETH rotation; rebalance monthly and cut pair if ETH underperforms basket by >15% in 30 days.