Institutional traders short Bitcoin at record speed, here’s why
Interest in shorting Bitcoin rose to record levels among institutional investors following the launch of the United States’ first short-bitcoin ETF.
The weekly report on digital asset fund flows from CoinShares reveals that investment products with short bitcoins have had an inflow worth 51 million dollars over the past week.
Other Bitcoin-related products saw a small inflow worth $ 0.6 million. In total, investment assets for digital assets had an inflow of $ 64 million.
US traders welcome short exposure to Bitcoin
ProShares Short Bitcoin Strategy ETF was launched on June 21, 2022. The fund tracks bets against Bitcoin prices, and moves the other way to the token. Of all investment product providers, ProShares alone received $ 43 million in inflows over the past week. Europe’s 21Shares is a distant number two with an inflow worth $ 7.7 million.
Growing interest in shorting Bitcoin comes after the token fell around 60% in the second quarter – its worst performance since 2011. Concerns over a US recession, combined with a cascade of bankruptcies in the crypto market, have hammered Bitcoin prices in recent months.
Analyzing CoinShares data by region, the United States saw weekly inflows of $ 46.2 million, although they mostly consisted of short-bitcoin inflows. Inflows in long positions on Bitcoin were observed in regions other than the United States. Brazil, Canada, Germany and Switzerland together for $ 20 million in inflows.
Europe may see renewed interest in crypto after the bloc officially launched comprehensive crypto-regulation, which requires KYC and disclosure practices from stock exchanges in the region.
Asset diversification
Ethereum saw a weekly inflow of $ 5 million, which it did twice in a row when the second largest cryptocurrency experienced positive emotions.
Investment products with several assets remained least affected by the negative sentiments from the crypto winter. Multi-asset products had an inflow of $ 4.4 million. These products have only had minor outflows twice during the year.
Solana, Polkadot and Cardano also experienced inflows. This shows investors’ confidence in these products despite the bear market and the fear of suspension of services from centralized exchanges.
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