Bitcoin ETF records $88 million inflows over 4 weeks
Data released by CoinShares reveals that positions shorts in Bitcoin ETFs continue to dominate inflows into digital asset investment products.
These products saw inflows of $15 million in the past week, bringing total investments in the asset class to a record $88 million over the past four weeks.
Amid the current crypto market winter, investors increasingly favor positions shorts (selling, or betting on the price drop) and, recently, the first position product shorts Bitcoin (BITI) in the US was launched by Proshares.
The fund allows investors to bet against the price of BTC, moreover, as the finance charges attached to conventional means of getting a short selling exposure can range from 5% to 20%, this makes BITI a more cost-effective strategy, as it charges an expense fee of 0.95%.
As a futures-based ETF, BITI aims to inversely track the performance of the S&P CME Bitcoin Futures Index. After a middling debut on the New York Stock Exchange (NYSE), the fund saw an impressive 380% increase in volume the next day. This highlighted strong demand for the products as investors continued to bet against Bitcoin.
Last week’s data shows that investments in digital asset products totaled $12 million, of which $15 million went to short investment products. Meanwhile, net outflows from long ETFs totaled $2.6 million.
Investors continue to increase their short selling positions in Bitcoin, pushing inflows of short Bitcoin products to a four-week record totaling $88 million.
At short positions are suitable for investors looking to profit from a drop in price. For example, when the price of Bitcoin drops by 20%, the value of a short product would increase by 20% and vice versa.
With the entire crypto market down, ETFs shorts help investors profit from falling Bitcoin prices. However, in a bull market, inflows into this investment model would drop significantly as investors turn to long-term investment products, as the inverse nature of short products makes them suitable for bear markets and, therefore, unsustainable in bull markets.