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According to the latest Coinshares report, the Proshares Bitcoin short product continues to dominate institutional inflows amid widespread bearish sentiment.

Launched near the end of June, Proshares Short Bitcoin Strategy was designed to allow investors a path to potentially profit from declining Bitcoin prices.

Coinshares reports that digital asset inflows totalled $64 million last week. However, amid pervasive bearish sentiment, institutional investors were more focused on the short-Bitcoin investment product by a significant margin. In fact, $51 million worth of capital went into the Proshares BITI product after it launched. Notably, this could be “due to first-time accessibility in the US rather than renewed negative sentiment.”

Crypto asset flows totalled $64 million. Source: Bloomberg

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BITI traded more than 870,000 shares, or $35 million of value, on its second day of trading. Bitcoin saw modest interest as only $600,000 was dedicated to the top crypto. The institutional demand for different coins also appears on Bitcoin market Dominance charts (including and excluding stablecoins).

Bitcoin Dominance (excluding stablecoins) reached 56% before cooling off. Since stablecoins such as USDT and USDC are considered ‘risk off’, this figure may be more accurate than stablecoin-inclusive 48% top.

Meanwhile, Ethereum enjoyed a second week of strong inflows, totalling $5 million last week. Ethereum investments struggled to attract inflows in the first two quarters of 2022. Year-to-date outflows hit approximately $451 million, with ETH performing poorly in comparison to other top cryptocurrencies like BTC. But this sentiment has seemingly shifted slightly in the last week, with ETH breaking the 11-week trend of outflows.

Small inflows into long investment products besides the US like Brazil, Canada, Germany and Switzerland totalled at around $20 million.

“Digital asset investment products saw inflows totalling US$64m last week, although the headline figures obscure the fact that a significant majority were into short-bitcoin investment products. Ethereum saw a second week of inflows totalling US$5m last week, breaking the 11-week spell of outflows. Multi-asset (multi-crypto) investment products saw inflows totalling US$4.4m and remain the least affected by recent negative sentiment with minor outflows in only 2 weeks of this year,” CoinShares noted in its weekly report.

In the 4th week of June, Bitcoin investment products witnessed historic outflows as funds and lenders such as 3AC and Celsius faced insolvency. Amid the uncertainty and liquidity concerns, the overall value of global digital assets under management dropped significantly. While 3AC has filed for bankruptcy, a recovery plan for the embattled lender appears to be underway.


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