Short-Bitcoin Funds Record $10M in Weekly Inflows: CoinShares

Investors poured money into short bitcoin funds last week as upbeat U.S. economic data and the prospect of renewed outsized rate increases by the Federal Reserve (Fed) weakened risk appetite in financial markets.

  • Short-bitcoin funds had inflows totaling $10 million during the week ended Feb. 24, according to crypto asset manager CoinShares. Long-bitcoin funds bled $12 million, the third straight weekly outflow.
  • Broadly speaking, digital asset investment products saw minor outflows of $2 million.
  • Short funds provide investors a bearish exposure to an asset's price. For instance, ProShares Short Bitcoin Strategy ETF offers short BTC exposure that profits from the cryptocurrency's price declines. A "short" position in financial markets is a bet on a price decline.
  • "We believe this reaction reflects nervousness amongst U.S. investors prompted by the recent stronger than expected macro data releases, but also highlights its sensitivity to the regulatory crackdown in the U.S.," CoinShares noted in the weekly report, explaining the inflow into short-bitcoin funds.
  • Bitcoin fell over 3% last week after failing to establish a foothold above a key resistance level at $25,000.
  • Ether, the second-largest cryptocurrency by market value, fell 2.4%, outperforming perhaps due to its rising deflation rate.
  • "Ethereum has remained relatively insulated from the recent negative sentiment, seeing only $0.2 million of outflows last week," CoinShares said, while noting minor inflows in Polygon, Solana and Cardano.