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Bitcoin shorting on the rise, as digital asset funds plummet

By Daniela Ešnerová

09:55, 30 June 2022

BTC short ETFs were thrown into the spotlight during the crypto market crash. – Photo: ShutterStock.

Bitcoin short investment products designed to let investors benefit from the coin’s price drops attracted record weekly inflows during the June crypto market crash. Meanwhile, the remainder of digital asset funds was hit with the largest outflows on record, a report from CryptoCompare shows

In June, BTC, ETH lost 34.8% and 38.6% respectively after insolvency of crypto lending companies caused fear in the market, propelling in what was labelled the “worst bear market in the crypto history,” on-chain analytics firm Glassnode. 

BTC/USD

The pain was felt in the crypto asset products. Bitcoin-based products averaged all-time high outflows of $161mn in June, according to CryptoCompare counts.

All digital assets investment products saw sharp declines, but ETFs were hit the hardest, declining 52% to $1.31bn, the latest edition of Digital Asset Management Review shows. 

Trust products, which have the biggest market share of  80.3%, fell by 35.8% to $17.3bn. 

Purpose and CoinShares funds recorded the largest outflows in BTC and ETH in June. Overall, the two registered drops of 56.7% and 57.1% in AUM in June, respectively, the data provider noted in its report.

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XRP/USD

0.59 Price
-1.750% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

DOGE/USD

0.13 Price
-1.630% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

SOL/USD

174.43 Price
-0.360% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

ETH/USD

3,505.11 Price
-0.600% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

ETH/USD

BTC shorting in spotlight

But the market downturn favoured a certain type of investment vehicles. Bitcoin short products recorded the largest weekly inflows during June averaging $3.10mn, defying the movements in the remainder of the crypto funds during what was exceptionally challenging month for the sector.

Shares21 Short Bitcoin ETP (SBTC) was the only product which saw its assets under management rise in June. The product, designed to provide inverse exposure to Bitcoin’s performance, added 1.30%  to reach its record high AUM of $16.5mn.

The ETP was also the only product that registered a positive 30-day return (30.8%) as of 23rd June, according to CryptoCompare.

The report noted that this new focus reflects “the negative price action of BTC, making it one of the few products that is able to take advantage of the current macroeconomic trend.”

This comes after US-based asset manager, ProShares, listed its short strategy ETF, ProShares Short Bitcoin Strategy ETF (BITI), New York Stock Exchange last week.

Markets in this article

BTC/USD
Bitcoin / USD
67026.60 USD
-400.65 -0.590%
ETH/USD
Ethereum / USD
3505.11 USD
-21.32 -0.600%

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