Bitcoin [BTC]: Short products to win as investors shy away from long positions

• Investors transfer funds to Short-BTC products afterwards fourth consecutive week of outflows
• With the Shanghai upgrade coming soon, investors will be wary of ETH

In a new one reportinvestment firm CoinShares found that ongoing concern among investors regarding the uncertain regulatory landscape for cryptoassets led to a fourth consecutive week of outflows for Bitcoin [BTC]. This, as investors gathered around short investment products instead.

The value of BTC fell sharply in the early trading hours on March 3, causing investor confidence in the coin’s short-term rally to fall further due to the uncertainty surrounding Silvergate Capital. This event contributed to long liquidations rising to a seven-month high, data from Coinglass revealed. According to CoinShares,

“The poor sentiment likely represents continued concern among investors over regulatory uncertainty for the asset class.”

Source: CoinShares

Too short or not too short?

According to CoinShares, last week, investors funneled funds into Short-Bitcoin products. As a result, Short-Bitcoin saw inflows of $1.8 million. On an annual basis, Short-Bitcoin products have logged inflows of $50 million.

Interestingly, despite the recent additions to Short-Bitcoin, the value of its total assets under management (AuM) has only risen by 4.2% TYD. This was in stark contrast to Long-Bitcoin AuM, which has increased by 36%.

Citing concerns over regulatory uncertainty for the asset class, CoinShares added that the discrepancy in performance suggested that short positions are not yet delivering the returns that some investors expect.

Source: CoinShares

For its part, Bitcoin logged its fourth consecutive week of outflows totaling $20 million. Due to the coin’s impressive performance towards the beginning of the year, its YTD inflow was $126 million.

While the entire investment products market suffered low volumes due to outflows last week, BTC experienced lower than usual market volume, CoinShares found. According to the report,

“Volumes across investment products were low at USD 844 million for the week, but a similar situation was seen for the entire Bitcoin market volumes, averaging USD 57 billion, 15% lower than usual.”

Overall, the low investment product volumes and lower than usual BTC market volumes suggested that investors have exercised caution and may adopt a wait-and-see approach.

Less inflow to Ether ahead of the Shanghai upgrade

There was less inflow into altcoins last week, with Ethereum [ETH] and Solana [SOL] receive $700,000 and $340,000, respectively. On the other hand, Binance’s BNB and Cosmos’ ATOM logged outflows of $380,000 and $210,000 respectively.

Investors have been cautious as the date for Ethereum’s Shanghai upgrade nears. There is a general sense of uncertainty regarding the direction of ETH’s price after previously locked ETH coins become available.

Source: CoinShares