According to weekly data from digital asset manager CoinShares released on Monday, institutional investors flocked to crypto products that bet on price declines, posting record inflows, as the collapse of digital asset exchange FTX reverberated throughout the industry and significantly dampened market sentiment.
As of the week ended November 18, crypto goods and funds had inflows of $44 million, however statistics showed that 75% of those flows represented investments in short crypto products.
“For traders and investors, every word that SBF says at this point increases the likelihood of harsher regulations in the crypto space, both in the U.S. and elsewhere,” he continued, referring to the former chief executive officer of FTX, Sam Bankman-Fried. “Token prices are likely to remain under pressure as long as fears over the regulatory hammer falling loom,” he continued.
In an interview with a Vox writer that was published last week, Bankman-Fried profanely disparaged US regulators, expressed regret about his decision to file for bankruptcy, and blamed the failure of FTX in part on “messy accounting.” Later, he claimed he had not intended for anyone to hear the conversation.
According to CoinShares data, bitcoin experienced inflows of $14 million; however, these were cancelled out by inflows into short-term investment products, leaving a net flow of a negative $4.3 million. Nearing a high of $186 million, the AUM on short bitcoin stood at $173 million.
The second-largest blockchain network, Ethereum, experienced modest outflows of $800,000. A record $14 million was invested by investors in short Ethereum products.
Most notably, Solana, XRP, Binance, and Polygon were among the altcoins that saw a large amount of outflows.
