As per CoinShares’ recent report, investment funds that concentrated on betting against Bitcoin faced a $23 million reduction in investments in the past week. Overall, investment products associated with cryptocurrencies saw a substantial outflow of $54 million during the week, with Bitcoin funds accounting for a loss of $32 million from that sum.
Surge in Bitcoin Investment
According to CoinShares, bitcoin investment products with short-term goals experienced the largest weekly outflows ever recorded, amounting to $23 million. Bitcoin funds also saw negative sentiment, with outflows totaling $32 million last week. The regions with the highest outflows were Germany and Canada, with $27 million and $20 million respectively.
However, Sweden was the only region that received some positive sentiment, with inflows of $1.3 million. CoinShares also observed that the crypto industry’s volumes are currently 50% lower than at the beginning of 2023, while investment fund volumes are 16% higher than their year-to-date average.
Last week, digital asset investment funds experienced a total of $54 million in outflows, marking the third consecutive week of outflows for this particular asset class. The majority of these outflows were observed in Bitcoin also along with some short-Bitcoin currencies, with some minor outflows also seen within some Ethereum oriented investment products.
CoinShares reported that investor sentiment towards blockchain-related stocks was negative last week, resulting in total outflows of $7.3 million. CoinShares reported in their blog that the highest weekly outflows for blockchain equities since the start of the year were observed, which they attribute to investors taking profits.
In the previous week, Bitcoin’s value declined by around 1%. The Federal Reserve’s recent hike in interest rates played a part in this minor decrease. The rates now range from 5-5.25%.
About Short-Term Bitcoin Investment
Investment products that enable investors to benefit from a decrease in the value of Bitcoin are known as short-term Bitcoin investment funds. These funds operate by borrowing Bitcoin and selling it in the market, with the expectation of buying it back at a lower price and returning it to its lender, thus profiting from the price difference.
Short-term Bitcoin investment funds are just one of the many ways to short Bitcoin, a strategy favored by investors who believe that the cryptocurrency is either overpriced or due for a correction. However, shorting Bitcoin can be a risky strategy due to the cryptocurrency’s high volatility and the possibility of experiencing sharp price fluctuations in either direction.