Bitcoin, Ethereum see Record Number of Short Investments

Paigambar Mohan Raj
Source: CryptoSlate

It would appear that a majority of investors have their money against the markets. According to Coinshares’ Fund Flows Weekly Report, short investments represented 75% of fund inflows. The analysis firm attributed this negative sentiment to the FTX collapse. Bitcoin (BTC) saw inflows of $14 million, but when considering short investments, net flows were a negative $4.3 million. Short-Bitcoin assets under management are currently at US$173 million, not far from the peak of US$186 million.

Ethereum (ETH) witnessed $14 million in inflows into shorts, a record for the asset. The crypto asset saw outflows totaling $0.8 million. The Shanghai update, which will permit the withdrawal of staked assets, has likely reignited doubt, the report added. Moreover, the FTX hack leading to large amounts of ETH being dumped might have had a hand to play.

The report further noted that crypto assets under management were at their lowest in two years, at $22 billion. This falls in line with Bitcoin being at two-year lows. The research also stated that $6 million in altcoins were cashed out by investors last week, primarily in Solana, XRP, Binance, and Polygon.

Will Bitcoin rebound anytime soon?

2022 has wreaked havoc on not just crypto but finance in general. Major economies are seeing record inflation numbers as the cost of living increases. The US saw its CPI numbers decline for October. But, the figure is still higher than the FED’s target. Consequently, interest rates are likely to be hiked once again. According to a Reuters poll, the FED might increase interest rates by 50 basis points after four consecutive 75 basis point hikes.

It is unlikely that Bitcoin or any other crypto will see any relief until interest rates are eased, which most likely will not happen anytime soon.

At press time, BTC was trading at $15,827.04, down by 2.4% in the last 24 hours.