Short Positions on Bitcoin Are at Record Going by Fund Inflows, CoinShares Reports

Capital is flowing into short bitcoin (BTC) funds at a record rate, while regular long bitcoin funds continue to see outflows, new data from the crypto research and investment firm CoinShares shows.

According to CoinShares’ latest digital asset fund flows report, short bitcoin investment funds – funds that rise in value when bitcoin’s price falls – saw inflows of USD 18m last week, the largest weekly inflow ever recorded for the category. The inflows brought the total assets under management (AUM) in short bitcoin funds to USD 158m.

At the same time, conventional bitcoin funds that rise in value as the bitcoin price rises saw outflows of USD 11m, the data showed. The outflows represent the 4^th consecutive week of outflows for bitcoin funds, CoinShares said.

Meanwhile, ethereum (ETH)-backed funds saw the second-largest outflows last week, with USD 2.1m leaving the funds. Among other altcoin-backed funds, solana (SOL) and avalanche (AVAX) each saw inflows of USD 0.5m.

Overall, crypto investment funds – both long and short – recorded inflows of USD 9.2m for the week, with short bitcoin funds accounting for the vast majority of the flows.

The overall inflows last week mark an improvement from two weeks ago, when the sector saw outflows of USD 27m. Back then, short BTC funds also recorded inflows, while long BTC and ETH funds saw outflows.

Commenting on the large flows into short bitcoin products in the latest report, CoinShares said it follows a “much more hawkish view” expressed by US Federal Reserve (Fed) chairman Jerome Powell during the Fed’s recent meeting in Jackson Hole. The hawkish tone appears to have been “unexpected by some investors,” the report added.