Inflows into digital asset funds witnessed four solid weeks of net positive inflows in the month trailing July 15, with assets under management (AUM) now totalling US$27bln.
The run followed a prolonged period of substantial outflows which saw AUM reach 16-month lows in the second half of June.
But while this may sound like a much-needed flu jab in a savage crypto winter, the figures don’t tell the full story.
According to data released by CoinShares, of the US$17.7mln of inflows in the week closing July 15, US$15.8mln went into the recently launched ProShares Short Bitcoin fund.
As a reverse-price position, this shows that the vast majority of supposed digital asset inflows are actually betting against a Bitcoin rally.
Conversely, Bitcoin and Ethereum long positions continued to drain funds, with respective outflows of US$2.6mln and US$2.5mln.
Little action occurred in the altcoin space, with US$500,000 flowing into Solana, US$300,000 flowing into Ripple and US$2mln flowing into multi-asset funds.
Total assets AUM across all fund providers currently stands at US$27bln, although this figure is obscured by the US$144mln held in short positions.
GrayScale is the largest fund manager by far with a total of US$17,9bln AUM.
Short yay, spot nay
Asset inflows into Short Bitcoin positions have been steadily increasing over the past month, with a 60% weekly increase noted in the latest CoinShares report.
This substantial jump in Short Bitcoin positions follows a regulatory nod for Short Bitcoin exchange-traded funds (ETFs) from the Securities Exchange Commission (SEC).
Spot Bitcoin ETFs — which would US stock market investors exposure to Bitcoin — have not been met with the same generosity, after the SEC rejected a proposal by investment fund Grayscale in June.
Known for its belligerent stance against cryptocurrency, these SEC rulings were met with anger by some within the Bitcoin community.
So the SEC won't approve a Bitcoin Spot ETF but they have approved an ETF to short Bitcoin which is launching tomorrow.
— Ouroboros (@0urobro) June 20, 2022
Despite the SEC’s spot snub, Bitcoin has been on a recent roll, having gained over 15% in the past seven days.
Little investment action occurred in the altcoin space, with US$500,000 flowing into Solana, US$300,000 flowing into Ripple and US$2mln flowing into multi-asset funds in the week ending July 15.