Investors redeemed a net amount of $5.8 million (roughly Rs. 45 crore) from short Bitcoin funds in the last seven days till June 17. According to a CoinShares report, this behavior indicates that the negative sentiment clouding the crypto industry at this point is nearing its peak. Bitcoin short funds are a type of investment strategy that speculates on an asset that is falling in value. Currently, with BTC now barely priced at $20,000 (about Rs. 15 lakh), investors seem to have lost their appetite to bet on BTC’s upcoming price swings, whether high or low.
Capital outflows amounting to $39 million (about Rs 305 crore) were withdrawn last week. In addition, the value of “assets under management (AUM)” also fell to its lowest level since February last year, at $36.3 billion (about Rs. 2,84,007 crore), a report by CoinShares said citing the findings of Room shares.
AUM is the total market value of investments that a person or entity manages on behalf of clients. In calculating AUM, financial institutions are known to count crypto assets, bank deposits, mutual funds, and cash in their possession.
Some Crypto Players Take Advantage Of The fall of BTC to provide investors with opportunities to bet on Bitcoin’s drop and churn profits.
This week, ProShares, an issuer of exchange-traded funds (ETFs), has announced that it will launch the first U.S. Bitcoin-linked short ETF on June 21. This will allow investors to profit from a drop in Bitcoin price or hedge their crypto exposure.
Bitcoin price fell below $20,000 (approx. Rs. 15.6 lakh) for the first time since December 20, 2021 on June 18, falling as low as $17,800 (approx. Rs. 13.9 lakh) the day after. At press time, the world’s largest cryptocurrency has fetched a price of $21,102 (roughly Rs. 16.5 lakh).
These difficult times have also highlighted the tendency of investors to “buy the dip”. Amid the current market decline, Bitcoin funds have seen inflows reaching $28 million (about Rs. 219 crore) over the past few weeks.
The crisis has also reduced capital inflows to other crypto assets alongside Bitcoin.
Ether-focused fundsfor example, lost around $70 million (around Rs 547 crore) last week, Coindesk noted.
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