FTX crisis leads to record inflows into short-investment products

November 22, 2022 Coin Telegraph

AUM

The aftermath of FTX’s collapse has soured crypto investor sentiment with "record” inflows into short-investment products last week, said CoinShares.

Institutional investors have responded to the negative sentiment caused by FTX’s collapse, with record institutional inflows into crypto-focused short-investment products.

According to CoinShares’ chief strategy officer James Butterfill, 75% of the total inflows by institutional crypto investors for the week ending Nov. 18 were placed in short investment products — essentially a bet that crypto prices will decline.

Butterfill said the takeup of short positions by investors is likely “a direct result of the ongoing fallout from the FTX collapse,” while the total assets under management (AUM) for institutional investors is now at $22 billion — the lowest in two years.

Over the week, $14 million was poured into short-ETH investment products. CoinShares said it was “the largest weekly inflow on record.”

CoinShares cited “renewed uncertainty” over Ethereum’s Shanghai upgrade slated for Sep. 2023 and mentioned that the sizeable amount of ETH held by the FTX exploiter as possible reasons for the negative sentiment.

Inflows into short investment products for Bitcoin (BTC) hit $18.4 million. Bitcoin short products were reported to have an AUM of $173 million coming close to the $186 million high.

Investors are also seemingly dropping altcoins with Solana (SOL), XRP (XRP), BNB (BNB), and Polygon (MATIC) product outflows totaling $6 million.

The newly reported inflows are a slight change from the week prior which saw the largest inflows in 14 weeks to crypto products totaling $42 million, although short Bitcoin products already started to see inflows of $12.6 million and blockchain equity products recorded the largest weekly outflow since May 2022.

Meanwhile, the ripple effect of investor distrust for centralized exchanges is taking hold in the traditional finance market with Coinbase posting an all-time low share price on Nov. 21.

The crypto exchange’s share price dropped 8.9% on the day, slipping to under $41 according to Google Finance. It has now slightly recovered to around $41.20 at the time of writing but continued to trade at a slight 0.19% negative after hours.

Coinbase’s stock price is down almost 88% since it went public on Apr. 16, 2021.

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Avalanche founder Emin Gün Sirer ‘quite bullish’ on crypto market prospects

July 6, 2021 Coin Telegraph

Avalanche

Despite the current market downturn, the Cornell University computer scientist and professor says he is bullish about crypto.

Emin Gün Sirer, creator of the Avalanche blockchain protocol, has said the current decline in crypto prices has not dampened his enthusiasm about the future of the market in general.

Speaking to Cointelegraph China, Sirer drew from his “unique vantage point” to offer some of the behind-the-scenes goings-on concerning the growing level of interest in crypto exposure among entities from outside the industry.

According to Sirer, everyone from politicians to central banks and even hedge funds have been inquiring about crypto over the last year. Indeed, the influx of hedge funds and institutional money, in general, seemed to catalyze a massive parabolic advance for the crypto market, beginning in Q4 2020 up until the market decline in May.

Now, the Cornell University professor said hedge funds are not the only big-money players coming into the crypto space.

“I have been getting contacts from retirement funds, not hedge funds, but retirement funds,” Sirer told Cointelegraph China, adding:

“Very different piece, far more slower-moving but with maybe 10 times more dollars under their control and they are slowly coming into crypto.”

The Avalanche founder’s comments are in keeping with revelations from the likes of NYDIG, which said retirement funds and sovereign wealth funds are the next major players to consider crypto exposure.

Despite Sirer’s long-term positive stance, the computer scientist stated that the short-term price action for crypto could remain locked in range-bound sideways accumulation throughout the summer months.

“I expect we will see sideways markets. This is going to be a summer where the price levels are going to maybe remain horizontal, maybe decline a little bit as well. That can happen. But I expect a resurgence back in October, November.”

Sirer also spoke about the limitations of existing blockchain protocols, such as scalability and other performance issues. As part of the interview, Sirer remarked that the architecture of existing blockchain networks is not efficient enough to support all the world’s assets.

According to the professor, attempting to solve these problems led to his creation of the Avalanche blockchain. Detailing the features of Avalanche, Sirer listed attributes such as the ability to create custom blockchains called subnets and community-driven governance architecture as combinations unique to the network.

Sirer also compared Avalanche with other major blockchains in the space, adding that his protocol offers superior performance over these chains at cheaper operating costs.

crypto price