Crypto Fund Inflows Plummet 76% as Short Sentiment Rises

• Inflows to crypto investment funds continued last week.
• These inflows dropped considerably compared to the week prior.
• Short investment products recorded significant inflows.

In recent weeks, crypto investment products have been riding on a high, recording week after week of net inflows and positive milestones , as crypto assets have recorded higher prices. Last week, the streak of inflows to these funds continued, but the data suggests that the recent run may be heading toward a break.

Crypto Inflows Experience Sharp Decline

Crypto investment funds saw net inflows totaling $43 million last week, extending the recent run of net inflows for an eleventh week, according to CoinShares’ most recent digital asset fund flows report released on Monday, December 11.

Crypto fund flows by asset
Source: CoinShares

Bitcoin investment funds recorded the most inflows, with $20 million. Aside from Bitcoin, Ethereum investment funds also saw inflows totaling $10 million.

Other crypto asset-related funds that recorded inflows include funds related to Solana and Avalanche. They each recorded inflows totaling $3 million and $2 million, respectively.

Despite the continued streak, last week’s inflows were significantly lower than the weeks before. For context, last week’s inflows represent a 76% decline from the $176 million in inflows recorded the week prior.

The decline came as investors appeared to anticipate recent price corrections in the crypto market.

Short Positions Rise

As highlighted by CoinShares, short Bitcoin investment funds received significant inflows of $8.6 million last week as the asset broke above the $44k price point . According to the asset manager, the rise in short positions came “as a proportion of investors see the current price rises as unsustainable.”

These suspicions of an imminent price correction have been validated as Bitcoin has plummeted below the $42k price point, down nearly 5% in the past 24 hours at the time of writing on Monday, December 11.

On the Flipside 

• Stocks related to crypto firms saw their largest weekly inflows of $126 million, suggesting that investors are still bullish on crypto.
• If investors believe we are in a bull run, as the recent inflows streak suggests, the recent decline in crypto fund inflows may represent a brief pause.

Why This Matters

Last week’s inflows to crypto funds suggest that while investors remain bullish, they anticipate price corrections after an extended price rally.

Read this for more on recent crypto inflows:

Crypto Funds Hit 10-Week Inflow Streak on Continued ETF Hope

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