BITI ETF Gathers Most Inflows Among Other Funds

ProShares Short Bitcoin Strategy ETF (BITI) gathered the most inflows among other funds since its launch last month.

Bitcoin (BTC) remains a popular target for institutional investment in July, but the money is not optimistic about its future.

Arcane Research's data, published on July 6, showed that in the first week of the month, institutional investors were concentrating their funds on products that gave exposure to shorting Bitcoin.

When Bitcoin's price goes down, traders short the cryptocurrency.

BITI, the first ETF to be "short" BTC, has been a success since its launch in the United States in late June.

Since July, the spread has increased dramatically. In just a few days, the short exposure jumped by over 300%.

In his Twitter comments, Arcane summarized the growth of BITI, the first inverse BTC ETF.

"After becoming the second-largest bitcoin-related BTC ETF in the U.S. after only four days of trading, the net short exposure has grown further and increased by more than 300% last week."
ProShares Short Bitcoin Strategy ETF (BITI) exposure chart. Source: Arcane Research/ Twitter
Chart showing the BITI's exposure to Bitcoin. Source: Arcane Research/ Twitter

The timing of BITI in the U.S. is significant in itself, as BTC/USD fell to multi-year lows of $17,600 when it did.

As Cointelegraph reported, analysts' expectations still skew to the downside, and BITI inflows seem to confirm that institutional sentiment is likewise.

CoinShares data on the investment activity of digital assets, published July 4, showed that Short BTC products received $51 million in inflows during that week — the majority of the total $64 million.

Despite the fact that short positions in BTC were dominating the news, CoinShares pointed to persistent demand for long-term investments.

"This shows that investors are increasing their holdings of Bitcoin at the current price, which could be due to first-time access in the US rather than renewed negative sentiment," it wrote.

GBTC's lack of business as usual

The Grayscale Bitcoin Trust (GBTC) continues to face challenges in the form of trying market conditions.

 Bitcoin price is rising as DXY loses its momentum. The coin could soon reach $23K if the trend continues.

After U.S. regulators turned down Grayscale's application to convert the Trust to a Bitcoin spot ETF, the firm started legal action, an indication of the industry's frustration with both regulatory scrutiny and declining asset prices.

Since the beginning of 2018, the Bitcoin spot price has been lower than that of GBTC shares, which is considered a premium. The gap between them has at times been more than 30%.

GBTC premium vs. asset holdings vs. BTC/USD chart. Source: Coinglass
GBTC's premium vs. assets holdings vs. BTC/USD chart, as seen in Coinglass