Bitcoin (BTC) remains a popular institutional investment target in July, but money is not betting on a bright future.
According to data from research firm Arcane Research published on July 6, institutional flows focused on products offering exposure to BTC sales in the first week of the month.
Bitcoin short strategy is the name of the game
Since its US launch in late June, the ProShares Short Bitcoin Strategy ETF (BITI), the first exchange-traded fund (ETF) to “short” BTC, has been a success.
That trend has only accelerated in July, with short exposure jumping more than 300% in days.as confirmed by the data.
“BITI, the first inverse BTC ETF, grew even more last week”, summarized Arcane in the Twitter comments.
“After becoming the second largest bitcoin-related BTC ETF in the US after just four trading days, net short exposure has grown further, rising by more than 300% in the past week.”
The timing of BITI’s arrival in the US is eye-catching in itself, as it comes as the BTC/USD pair has hit multi-year lows of $17,600.
As Cointelegraph reported, analyst expectations remain biased to the downside, and BITI inflows appear to confirm that institutional sentiment is the same.
Separate data released by digital asset investment firm CoinShares on July 4, meanwhile, puts weekly inflows into short BTC products at $51 million—easily the majority of the week’s total of $64 million.
While long investments in BTC were only $20 million, CoinShares highlighted, however, the persistent demand for this type of product despite the fact that shorts monopolize the attention.
“This highlights that investors are adding to long positions at current prices, with entries into short Bitcoin possibly due to first-time US accessibility rather than renewed negative sentiment,” he wrote.
Business (or lack of) as usual for GBTC
Meanwhile, these are still testing times for the stalwart institutional Bitcoin investment vehicle, the Grayscale Bitcoin Trust (GBTC).
After US regulators rejected Grayscale’s request to convert the trust into a Bitcoin spot ETF, the company launched legal action, a sign of the frustration facing an industry facing both regulatory scrutiny and to falling asset prices.
The so-called GBTC premium, the difference between the spot price of Bitcoin and GBTC shares, has been negative for more than a year, at various times reaching a discount of more than 30%.
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