Institutional Investors Short $BTC While Betting on $XRP, $ADA, and Multi-Asset Products

Institutional investors have, throughout the month of September, added to bets against the flagship cryptocurrency Bitcoin ($BTC) by buying up products shorting BTC, while also betting on products offering exposure to $XRP, $ADA, and multiple assets.

According to CryptoCompare’s latest Digital Asset Management Review report, for the first time in two years, the average daily volumes for all exchange-traded products (ETPs) on the report dropped below $100 million after falling nearly 80% from this year’s high recorded in January.

The report details that institutional investors looking to gain regulated exposure to the digital asset space are “likely to turn to the growing number of crypto investment products” such as those contained in the report, and adds that these make “crypto more accessible to investors because they can be traded on traditional stock exchanges.”

Per the report Short Bitcoin Products, which “correspond to the inverse (-1x) of the daily performance of the Bitcoin futures index” saw a rise in their assets under management in September, with the ProShares Short Bitcoin Strategy ETF (BITI) seen an AUM rise of 43.9% to $98.8 million, while the 21Shares Short Bitcoin ETP (SBTC) saw an increase of $18.9 million.

CryptoCompare’s report adds:

As macro-conditions worsen and the price of major crypto assets continues their downward trend, investors will likely move towards short bitcoin products to profit or to hedge their cryptocurrency holdings. 21Shares SBTC were the only exchange-traded product that saw positive 30-day returns this month, rising 5%.

Products offering investors exposure to Ethereum endured “one of their most challenging months with all products dropping more than 10%” over the last 30 days, even after the cryptocurrency’s network moved from Proof-of-Work to Proof-of-Stake.

Meanwhile, institutional investors have been betting on the broader cryptocurrency market, with multi-asset investment products seeing $1.5 million in average weekly net flows, and $XRP investment products seeing $200,000, the same amount of average weekly net flows as Cardano ($ADA) investment products saw throughout September.

Source: CryptoCompare

$BTC and $ETH investment products saw average weekly net flows of -$2.2 million and -$26.4 million, respectively. As for product types, assets under management in trust products, dominated by Grayscale, fell 12.5% to $17.3 billion, equivalent to 76.9% of total assets under management for cryptocurrency investment products.

The assets under management represented by exchange-traded funds (ETFs) dropped in September to $2.25 billion, down 21%, while exchange-traded notes (ETNs) and exchange-traded commodities (ETCs) experienced falls of 10.5% and 16.5% respectively to $1.24 billion and $1.69 billion.

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