FTX crisis drives record inflows into short-term investment products

The aftermath of the FTX collapse has worsened crypto investor sentiment with "record" inflows into bullion products at short term last week, CoinShares said.

Institutional investors reacted to the negative sentiment caused by the FTX collapse, with record institutional inflows into short-term crypto-focused investment products.

According to CoinShares Chief Strategy Officer James Butterfill, 75% of total institutional investor crypto inflows for the week ending November 18 were placed in short investment products – essentially a bet that prices cryptos will drop.

Butterfill said investors taking short positions are likely "a direct result of the continued fallout from the FTX crash", while total assets under management (AUM) for institutional investors rises now at $22 billion - the lowest in two years.

During the week, $14 million was invested in short-term ETH investment products. CoinShares said it was "the largest weekly inflow ever".

CoinShares cited “renewed uncertainty” regarding the Ethereum upgrade in Shanghai scheduled for September 2023 and mentioned the large amount of ETH held by miner FTX as a possible reason for the negative sentiment.< /p>

Inflows into short investment products for Bitcoin (BTC) reached $18.4 million. Short Bitcoin products reportedly have an AUM of $173 million, closing in on the high of $186 million.

Investors also seem to be giving up...