Selling Short Bets on Bitcoin Are at Record highs, Investment Fund Inflows Show

There have been minor inflows into digital asset investment products, according to a report by CoinShares. These products recorded inflows totaling around $9.2 million. However, most of these inflows were into short investment products.

Short bets on Bitcoin reach record highs

According to a report by CoinShares, Bitcoin reported outflows of around $11 million, which was the fourth consecutive week of outflows reported. The total number of outflows within the four weeks now totals $70 million.

Additionally, short Bitcoin investment products recorded $18 million in inflows last week. This brought the total assets under management (AUM) to a record $158 million. Besides Bitcoin, the rest of the cryptocurrency market has also recorded minor inflows. For instance, Solana and Avalanche saw inflows totaling around $0.5M.

The weekly CoinShares report showed that despite the ongoing bear market, digital asset investment products reported minor outflows of around $9.2 million, with most of these funds going towards short investment products.

The trend reported during the first week of September is similar to the other reported the previous week. The week’s trading volumes reached a multi-year low of $915 million.

The recent price dips have also affected the total AUM, dropping to $27.9 billion. This is the lowest level reported since the beginning of July 2022. At the beginning of the year, the AUM stood at $64 billion.

The CoinShares report also analyzed the reactions of different regions to the ongoing bear market. The data shows varying sentiments across the market despite the low trading sizes. Brazil and Canada saw total inflows of $3.2 million and $4.7 million, respectively, while Germany and Switzerland recorded inflows of $1.6 million and $1.7 million, respectively.

In the US, there was a notable negative sentiment in the market, with the inflows totaling $0.8 million. The majority of these inflows were into short Bitcoin investment products. The negative sentiment in the US comes after a Federal Open Market Committee (FOMC) meeting that elicited a hawkish sentiment. Investors had earlier anticipated that the meeting would yield positive news in the market.

On the other hand, Bitcoin reported outflows of $11 million, which was the fourth consecutive week of outflows. Short Bitcoin investment products also saw a record $18 million in inflows last week after bringing the total AUM to a record high of $158 million.

Multi-asset products have also continued to report inflows that have reached $3.3 million. On the other hand, altcoins also reported minor inflows, with most of the inflows coming into Solana and Avalanche.

Bitcoin plunges below $18K

Bitcoin and the entire web 3.0 & crypto market have been on a notable decline since the beginning of the week. The coin has plunged to the June 2022 lows of around $18K, and there are concerns that the pullback could persist as the selling pressure intensifies. Amid this price decline, Bitcoin has also recorded a loss in market cap, which now stands at around $350 million.

The price dips come amid a hawkish global financial market. The cryptocurrency market is not the only one trading red this week, as stocks have also recorded dips following Russia’s decision to indefinitely halt the Nord Stream 1 Pipeline, which is expected to trigger an energy crisis in Europe.

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