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Crypto Investment Products Saw $61 Million in Inflows Last Week, but Most of the Money Went Short on Bitcoin

Finance

coincodex.com 05 July 2022 12:42, UTC
  
Reading time: ~2 m

Key highlights:

  • A report by crypto asset manager CoinShares shows that $61 million flowed into cryptocurrency investment products last week
  • However, $51 million of that went into an ETF providing short exposure to Bitcoin
  • Investor interest in Ethereum investment products showed some signs of recovery

Crypto investment products see $61M in inflows, but $51M went into a short Bitcoin ETF

Cryptocurrency investment products have seen $61 million in inflows last week, according to a report by crypto asset management firm CoinShares. The report covers products such as ETFs, ETPs and mutual funds that give investors exposure to cryptocurrency.

While the fact that crypto investment products recorded inflows last week seems like a bullish sign for crypto at face value, CoinShares highlighted that $51 million of inflows went into the ProShares Short Bitcoin Strategy product, which is an ETF providing short exposure to Bitcoin. In other words, the investors parking their money into this product are betting that the price of Bitcoin will decline or hedging their investments.

CoinShares head of research James Butterfill provided some additional context to the inflows into the short Bitcoin ETF, saying that the inflows might have not been caused by an additional negative turn in sentiment, as they could be explained simply by the fact that the product has just become accessible to investors.

“Small inflows were seen into long investment products in regions other than the US such as Brazil, Canada, Germany and Switzerland totalling US$20m. This highlights investors are adding to long positions at current prices, with the inflows into short-Bitcoin possibly due to first-time accessibility in the US rather than renewed negative sentiment.”

Products for investing in Bitcoin saw extremely modest inflows of just $0.6 million. A similar figure was displayed by products providing exposure to Solana, Polkadot and Cardano.

Meanwhile, products providing exposure to Ethereum recorded $4.9 million in inflows. This represents the second consecutive week of inflows for Ethereum products, with investors showing some renewed interest after a big exodus from Ethereum investment products earlier in the year. Ethereum investment products have seen a massive $450.9 million worth of inflows since the start of 2022.

Overall, the sentiment in the cryptocurrency is still overwhelmingly negative with Bitcoin struggling to stay above the $20,000 mark. Beyond the price action, sentiment is also negatively affected by the fact that several cryptocurrency lenders have found themselves in hot water due to the bearish market conditions. Celsius, Voyager and Vauld are just a few examples of crypto lenders that are currently not allowing their users to withdraw funds. 


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