BTC Short Funds See Major Outflows, May Mean Negative Sentiment Close to Peak

Short Bitcoin funds are an investment strategy speculating on an asset falling in value. Investors redeemed a net amount of $5.8 million (roughly Rs. 45 crores) from short Bitcoin funds in the last seven days through June 17. As per a CoinShares report, this behavior indicates that the negative sentiment clouding the crypto industry, at this point, is close to its peak. With BTC barely maintaining a price point of $20,000 (roughly Rs. 15 lacks), investors seem to have lost the appetite to bet on BTC’s upcomingBTC’se fluctuations, whether high or low.

Capital outflows of $39 million (roughly Rs. 305 crores) were pulled out last week. In addition, the value of ‘assets under ‘management (AUM)’ also declined’ to its lowest since February last year, to $36.3 billion (roughly Rs. 2,84,007 crore), a report by CoinShares said, citing findings by CoinShares.

AUM is the total market value of the investments a person or entity manages on behalf of clients. In the calculation of AUM, financial institutions are known to count crypto holdings, bank deposits, mutual funds, and cash in their possession.

Some crypto players are taking advantage of BTC’s slump to BTC’s investors’ opportunities to bet on Bitcoin’s dip in Bitcoin’s profits.

This week, ProShares, an issuer of exchange-traded funds (ETFs), said it would launch the first US short Bitcoin-linked ETF on 21 June. This will enable investors to profit from a decline in Bitcoin’s pricBtcoihedge their crypto exposure.

Bitcoin’pricBitcoin was below $20,000 (roughly Rs. 15.6 lacks) for the first time since 20 December 2021 on 18 June, falling as low as $17,800 (roughly Rs. 13.9 lacks) the following day. At the time of publishing, the world’s largesworld’socurrency has recovered to a price of $21,102 (roughly Rs. 16.5 lacks).


These rough times also highlighted the tendency of investors that compel them to ‘buy-the-dip’.’In recent weeks, Bitcoin funds saw inflows touching $28 million (roughly Rs. 219 crores) amid the current market drop.

The crypto sector’s market cap, which stood at over $2 trillion (roughly Rs. 15,610,304 crores) around March this year, currently stands at $904 billion (roughly Rs. 90,483 crores), as per CoinMarketCap.

The slump has also axed capital inflows to other crypto assets alongside Bitcoin.

Ether-focussed funds, for instance, lost around $70 million (roughly Rs. 547 crores) last week, Coindesk noted.

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Bella E. McMahon
I am a freelance writer who started blogging in college. I am fascinated by human nature, politics, culture, technology, and pop culture. In addition to my writing, I enjoy exploring new places, trying out new things, and engaging in conversations with new people. Some of my favorite hobbies are reading, playing music, making crafts, writing, traveling, and spending time with my family.