Crypto investment flows show less bets on Bitcoin decline

abdelaziz Fathi

As the price of bitcoin continues to consolidate around recent lows, investors trimmed their positions in funds designed to profit from further declines in the cryptocurrency.

Investors redeemed a net $7.1 million from short bitcoin funds in the seven days through October 21, the crypto asset manager CoinShares wrote. On a month-to-date basis, assets under management (AUM) in these funds had hit an all-time high of $15 million, representing 10% of total AuM.

While flows have been mixed recently for short-bitcoin, it was the only investment product showing some semblance of conviction in direction of trade at present. The retreat in the short bitcoin positions is usually a bullish sign and might be suggesting negative sentiment is close to its peak.

Overall, there were minor inflows for Bitcoin-specific funds for the 6th consecutive week, which totaled $4.6 million.

In terms of the entire AUM of all funds that CoinShares tracks, last week’s outflows were $5 million in a continuation of this apathetic period that began in September. Excluding the outflows from short products would have led to an overall minor inflow last week.

This trend is also highlighted by investment product volumes which were $758 million, the lowest since October 2020 and far off the average of $7 billion a week seen this time last year.

Breaking down the latest statistics, Coinshares said the aggregate data masks a significant regional polarization of views. In particular, Sweden, Canada and the US saw the most action with outflows totalling $4.5 million, $1.9 million and $1.2 million, while Germany, Brazil and Switzerland all saw minor inflows.

Apart from Bitcoin, Ethereum saw minor outflows for the third consecutive week totalling $2.5 million bringing outflows post the Merge to $11.5 million, just 0.2% of AuM. Other assets including XRP saw inflows of $0.8 million, while small they are close to the largest since the lawsuit with the SEC began.

CoinShares is Europe’s largest digital asset investment firm. The company reported its secomd quarter revenue at £14.2 million, down from Q2 2021’s £19.6 million. Adjusted EBITDA also dropped sharply to £8.2 million from £28.6 million in the three months through June 2021.

As the market environment has changed in the past three months, with cryptocurrencies under pressure, the institutional-favorite platform has experienced difficulties gaining confidence from investors. Though vowing to focus on “long-term growth,” as indicated in the report, the asset manager’s total comprehensive income for Q2 was a loss of £0.1 million from a positive income of £26.6 million in Q2 2021. That was Coinshare’s its first negative quarter since going public in March 2021.

Read this next

Retail FX

Financial Commission adds Ultima Markets to membership roster

Multi-asset brokerage firm Ultima Markets, operating under the trading name Ultima Markets Ltd, has been granted membership of the Financial Commission, marking the most recent inclusion into the ranks of the self-regulatory organization.

Digital Assets

Bitcoin hits fresh record high amid massive short squeeze

Bitcoin has surged to record highs against both the euro and the pound, hitting €60,447 and £51,736 respectively on Coinbase. The primary cryptocurrency has seen an almost 7% increase in the past 24 hours.

Digital Assets

US court rules crypto trades as securities in Coinbase case

A US court ruled that trading crypto assets on platforms like Coinbase constitutes securities transactions.

Market News

Weekly Data: Oil and Gold: Brief Review before the NFP

This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the main market drivers for the near short-term outlook.

Institutional FX

FXSpotStream reports lower volumes for February 2024

FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for February 2024, which moved lower on a monthly basis.

Fundamental Analysis

Global FX Market Summary: EUR, USD, Gold March 4th,2024

US Dollar Weakness: The US Dollar (USD) is currently struggling to gain strength due to a combination of factors.

Technical Analysis

Bitcoin Technical Analysis Report 4 March, 2024

Bitcoin cryptocurrency can be expected to rise further toward the next resistance level 69000.00 (former multiyear high from January)

Opinion

Finding Opportunity in Challenge: Why New Regulations Offer a Chance For Business to Get on Top of Data Management

The combination of CESOP, PSD3 and the PSR, has put businesses under new pressures. In this engaging article, André Casterman, Senior Advisor at Intix provides invaluable guidance on how companies can stay ahead of the curve.

Institutional FX

Finalto launches Prime of Prime offering on LSEG’s FX Matching venue

“By combining our expertise in Prime of Prime services with LSEG’s robust trading platform, we aim to empower clients with the tools and resources needed to navigate the FX market with confidence.”

<