Reports said that institutional investors have responded to the negative sentiment caused by FTX’s collapse, with record institutional inflows into crypto-focused short-investment products.
It has been reported that according to CoinShares chief strategy officer James Butterfill, 75% of the total inflows by institutional crypto investors for the week ending November 18 were placed in short investment products, essentially a bet that crypto prices will decline.
Butterfill said that the takeup of short positions by investors is likely “a direct result of the ongoing fallout from the FTX collapse,” while the total assets under management (AUM) for institutional investors is now at $22 billion, the lowest in two years.
However, over the week, $14 million was poured into short-Etherinvestment products. CoinShares said it was “the largest weekly inflow on record.” CoinShares cited “renewed uncertainty” over Ethereum’s Shanghai upgrade slated for September 2023 and mentioned the sizeable amount of ETH held by the FTX exploiter as possible reason for the negative sentiment.
The report said that inflows into short investment products for Bitcoin hit $18.4 million. Bitcoin short products were reported to have an asset under management (AUM) of $173 million coming close to the $186 million high.
Likewise, the newly reported inflows are a slight change from the week prior, which saw the largest inflows in 14 weeks to crypto products totaling $42 million, although short Bitcoin products already started to see inflows of $12.6 million and blockchain equity products recorded the largest weekly outflow since May 2022.
Meanwhile, the ripple effect of investor distrust for centralized exchanges is taking hold in the traditional finance market with Coinbase posting an all-time low share price on Nov. 21.
Thus, the crypto exchange’s share price dropped 8.9% on the day, slipping to under $41, according to Google Finance. It has now slightly recovered to around $41.20 at the time of writing but continued to trade at a slight 0.19% negative after hours.
Source: Cointelegraph