Bitcoin (BTC), a popular target for institutional investments, is still a hot topic in July. However, the money isn’t betting on a brighter future.
Data from Arcane Research, July 6th, shows that institutional flows were centered on products that allow shorting BTC in their first week.
The name of the game is shorting Bitcoin
The ProShares Short Bitcoin Strategy ETF ETF (BITI) was launched in the United States in June. It is the first ETF to be “short” BTC and has been a huge success.
This trend only increased in July with short exposure rising over 300% in a matter of days, data confirms.
“BITI, first inverse BTC ETF grew further last Week,” Arcane stated in his Twitter comments.
After only four trading days, BTC ETF became the second-largest Bitcoin-related ETF in the U.S. The net short exposure has grown further to more than 300% this week.
ProShares Short Bitcoin Strategy ETF (BITI) exposure chart. Source: Arcane Research/ Twitter
It is obvious that BITI in the U.S. was scheduled at a time when BTC/USD fell to multi-year lows $17,600.
Cointelegraph reported that analysts still expect the worst, and that BITI inflows seem to confirm this.
CoinShares published separate data on July 4 that showed weekly inflows to Short BTC products at $51million — easily the largest portion of the week’s $64 million.
Although long BTC investments only reached $20 million, CoinShares highlighted the demand for these products despite shorts taking the spotlight.
It stated that this showed that investors are increasing their long positions at current prices. The inflows to short-Bitcoin could be due to the first-time access to the US, rather than renewed negative sentiment.
GBTC: Business as usual (or lack thereof)
Grayscale Bitcoin Trust (GBTC), a stalwart institution-based Bitcoin investment vehicle, is still in testing.
Related: Bitcoin price closes to potential springboard of $23K as DXY cools
Grayscale’s request to convert the Trust into a Bitcoin spot ETF was rejected by the U.S. regulators. This is a sign that the industry is dealing with increasing regulatory scrutiny and falling asset prices.
The so-called GBTC Premium, which is the difference between Bitcoin spot prices and shares of GBTC has been negative for more than a year. At some points, it was a greater than 30% discount.
GBTC premium vs. assets vs. BTC/USD chart. Source: Coinglasscom. You should do your research before making any investment or trading decision.