Deposits into cryptocurrency investment products rose sharply last week as institutional investors bought the dip amid the market-wide collapse triggered by the bankruptcy of FTX and Alameda Research.
Digital asset investment products saw deposits totaling $42 million in the week ending Nov. 13, the biggest increase in 14 weeks, according to CoinShares data. Bitcoin (BTC) investment products recorded the largest inflows, with $19 million, followed by multi-asset funds and Ether (ETH), with $8.6 and $5.9 million, respectively.
Investors also bet on a further deterioration in market conditions, with Bitcoin short products recording $4.8 million in weekly deposits.
Net inflows were recorded in the main regions, led by the United States (USD 29 million), Brazil (USD 8 million) and Canada (USD 4.3 million).
Although investors were buying cryptocurrency investment products, their outlook on blockchain company stocks soured. Data from CoinShares revealed that blockchain company stocks saw $32 million in weekly withdrawals, the most since May. Meanwhile, the broader stock market posted its best week of gains since March, with the tech-heavy Nasdaq Composite gaining 8.1% on weaker-than-expected inflation data.
The cryptocurrency market faced fresh selling pressure last week as Sam Bankman-Fried’s FTX exchange filed for bankruptcy following a run on its assets. The bank run was triggered by Binance’s sudden liquidation of FTX Token (FTX) on Nov. 6. Binance CEO Changpeng Zhao expressed interest in buying the collapsing derivatives platform, but backed out less than 24 hours later due to an apparent hole in FTX’s financials. Since then, it has come to light that FTX has about $8 billion in liabilities.
Full disclosure: Binance never shorted FTT. We still have a bag of as we stopped selling FTT after SBF called me. Very expensive call. https://t.co/3A6wyFPGlm
— CZ Binance (@cz_binance) November 14, 2022
Cryptocurrency prices appear to have stabilized after last week’s plunge, and Bitcoin is currently north of $16,500, according to Cointelegraph’s BTC Price Index. However, market sentiment could take months or even longer to recover.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.