FTX Crisis Results Record Inflows Of 75% Into Short-Investment Products

FTX Crisis Results Record Inflows Of 75% Into Short-Investment Products

Key Insights

  • CoinShares report showed that short investment products accounted for 75% of the total inflow to crypto products.
  • Institutional investors diverted their funds to short investments in response to the FTX crisis.
  • Short investment options include margin trading, futures market, binary options trading, and prediction markets.

Since the FTX crisis that started with bankruptcy and the eventual collapse of the exchange, a lot has occurred in the cryptocurrency ecosystem. Right from industry players responding to the debacle to regulators and Government agencies rolling out frameworks. 

One of the significant responses to the FTX crisis is investors shifting to other investment products. That is, while some other investors can not yet ascertain their loss, some have diversified their investments. 


A weekly data report by CoinShares showed how institutional investors invested their funds. The data showed that these investors had diverted their funds to short-investment products. 

CoinShares, a digital asset manager, reported that crypto products and funds saw inflows of $44 million. Of this total inflow, 75% were investments in short crypto products. 

Similarly, the report showed that total assets under management declined to $22 billion. CoinShares considered this the lowest in two years. 

Additionally, the report showed that there were minor outflows of $800,000 for Ethereum. It also showed that investors diverted their record inflows to short-Ethereum products amounting to $14 million. 

Understanding Short-investment Products

The spike in short investment products inflow has shown that the market is lucrative. It further supports the assertion that institutional investors have various use cases to diversify their investments. 

Short investment products are investment opportunities in crypto that allows investors to bet on the price of an asset declining.  In short investments, investors can bet on several crypto assets when they believe such assets will crash (soon). 

Furthermore, there are various short investment options. They include margin trading, Futures market, binary options trading, prediction markets, Using Bitcoin Contracts for Differences (CFD), etc.   

It is worthy of note that short investment products are now gaining mainstream adoption. No wonder institutional investors flock to it in response to the FTX crisis.

Short term investment
Short term investment

FTX Crisis Leads To Increase in Short-investment Products

The data contained in the CoinShares weekly report showed how investors reacted to the FTX crisis. 

The report highlights that 75% of the total inflow of $44 million were investments in short crypto products. 

 James Butterfill, CoinShares Chief Strategy Officer, said this position by investors is likely "a direct result of the ongoing fallout from the FTX crisis."  

Furthermore, inflows into short investment products for Bitcoin (BTC) totaled about $18.4 million. It was reported that Bitcoin's products Asset under management (AUM) rose to $173 million. This figure is a little short of the highest Bitcoin short products AUM recorded. 


Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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