Prominent digital asset investment company CoinShares shared a report highlighting the negative sentiment of institutional investors towards major cryptocurrencies. It highlighted institutions are betting on the Bitcoin and similar other crypto assets prices to drop further.
According to the report, the reason behind the negative sentiment of the institutional investors is the recently reported short product inflow. The short product inflow consisted of about 75% of the overall inflows. It remained the largest recorded inflow till date.
Primarily the short products enable the investors to short on crypto assets—a way to bet on the crypto asset’s price to go down. Last week, a large number of investors came together and allocated their money on the bet that bitcoin (BTC) and Ethereum (ETH) prices would continue to tumble.
The assets under management belong to the crypto investment products, the report added, also witnessed a significant drop. Currently it stays at 22 billion USD, considerably the lowest level in the last two years. This figure clearly showcases the collectively negative sentiment around the crypto assets among the investors.
In addition to it, the report further noted that more investors came forwards and went on to add more months into the products meant for short the Ethereum investments. This money accounted for about 14 million USD.
While explaining the potential reasons for the negative sentiment among the investors around the crypto assets, CoinShares cited the recent fall of Bahamian crypto exchange FTX. It added in the report that the FTX bankruptcy filing could be the potential action that resulted in the complaining of negative influence on the investors seeking short products.
Further, the report also mentioned that the investors also noted the selling off of other prominent altcoins including Solana (SOL), XRP (XRP), Polygon (MATIC) etc. This crypto asset sale was said to be worth around 6 million USD.
Clearly the crypto market was not in the situation to bear the massive hit that came in the wake of collapse of behemoth sized crypto exchanges like FTX. Sam Bankman Fried’s exchange was valued more than 32 billion USD before its abrupt collapse.
The allegations of crypto exchange suggest that the firm was using their users’ money and making risky investments. For this, SBF’s crypto exchange was using his trading firm Alameda Research. With the information revealed the users flocked to the exchange and initiated withdrawals.
FTX was unable to operate the massive number of withdrawals and halt the operations. In just a matter of days, FTX went on to file for bankruptcy under the Chapter 11 Bankruptcy Code.
Source: https://www.thecoinrepublic.com/2022/11/23/ftx-bankruptcy-filing-fueled-negative-sentiment-among-the-investors/