Assets under management (AUM) in the crypto world refers to the amount of money (typically denoted in US dollars) invested in cryptocurrency funds and digital asset investment products. AUM measures how much cash an investment firm has invested in digital assets within the crypto world.
A higher figure for assets under management denotes a rise in interest in this asset class among institutional investors. This is considered a bullish sign for cryptocurrencies, as it indicates strong investor confidence among large institutions and investment firms in the future potential of this asset class.
Crypto AUM varies based on the number of inflows and outflows to funds from investors. During a bear market or bearish mood, the crypto market typically experiences more outflows than inflows, bringing down the assets under management figure. However, when the investor sentiment towards crypto assets is upbeat in a bull market, inflows exceed outflows, sending the AUM higher.