Short-Bitcoin ETF sees first week of outflows since launch

Short-Bitcoin exchange-traded funds (ETFs) recorded their first week of outflows after five consecutive weeks of inflows, according to CoinShares data. The report also showed that digital asset investment products had inflows of $81 million last week, totaling over $0.53 billion in inflows over the past five weeks.

Short-Bitcoin ETF Stops Seeing Inflows

Digital asset manager CoinShares published a new weekly report on digital asset fund flows on Monday. According to the report, Bitcoin ETFs recorded inflows of $85 million last week, in contrast to the world’s only short Bitcoin ETF which saw its first week of outflows of $2.6 million for the first time after a 5-week streak of inflows. It is the first ever short-Bitcoin ETF, which traded $35 million in Bitcoin a day after its launch in June.

CoinShares data also showed that digital asset investment products recorded $81 million in inflows last week, marking a total of $0.53 billion in inflows over the past five weeks. On a monthly basis, the strongest inflow numbers were seen in July, totaling $474 million, which offset almost all outflows in June of $481 million.

Based on the region, most of the inflows came from the United States and Canada, totaling $15 million and $67 million, respectively. On the other hand, Brazil and Sweden recorded smaller outflows.

Surprisingly, multi-asset investment products recorded a second consecutive week of outflows, totaling $3.7 million during the period. This suggests that investors are making increasingly targeted investments.

Solana’s inflow was $1.5 million last week, but the altcoin remains investors’ favorite choice with a total of $114 million inflows this year. Polkadot inflows totaled $0.4 million last week.

Although investors have become somewhat more bullish, trading activity remained significantly weak amid the ongoing market decline, with last week’s volumes totaling $1.3 billion. This compared to an average weekly volume of $2.4 billion this year.

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What is a Short-Bitcoin ETF?

ETF provider ProShares launched the first-ever short Bitcoin ETF in June called the “ProShares Short Bitcoin Strategy”. The fund, which debuted under the ticker symbol BITI on the New York Stock Exchange, marks the first fund to allow crypto investors to place bets against the world’s largest cryptocurrency.

Shortly after launch, BITI accounted for 79% of weekly digital asset fund inflows in early July, totaling $64 million in inflows in one week. The call for the recently launched short-Bitcoin ETF came after Bitcoin’s sharp drop of more than 50% so far this year.

This trend continued through last month, with BITI reaching a record $88 million in inflows in just four weeks. Crypto investors have been favoring short Bitcoin positions for the past few months, but the new data may indicate the trend is over as investors become more bullish on crypto.

Do you think the next crypto bull run is near? Let us know in the comments below.

About the author

Tim Fries is the co-founder of The Tokenist. He has a B. Sc. in mechanical engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate in the investment team at RW Baird’s US Private Equity division and is also a co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.