NEW YORK, Nov 21 (Reuters) – Institutional investors rushed into crypto products betting on lower prices, seeing record inflows, as the slump in digital asset exchange FTX rippled through the market. industry and weighed heavily on market sentiment, according to weekly digital data. asset manager CoinShares released on Monday.
Crypto products and funds saw inflows of $44 million, as of the end of the week of November 18, but 75% of those flows represented investments in short crypto products, according to the data.
Total assets under management plunged to $22 billion, the lowest in two years, CoinShares said.
FTX filed for bankruptcy protection in the United States more than a week ago in the most publicized crypto implosion to date. FTX’s downfall came after traders withdrew $6 billion from the platform in three days and rival exchange Binance abandoned a bailout deal.
Last week, the executive hired to lead the FTX Group into bankruptcy, John Ray, presented his initial findings of improper funds transfers and poor accounting during the crypto exchange’s collapse, describing it as a “complete failure” of controls.
“Even for historians of corporate fraud, the scope and audacity of the FTX confiscations defy imagination,” said Matt Weller, global head of research at FOREX.com and City Index.
He added, referencing former FTX CEO Sam Bankman-Fried, “For traders and investors, every word that comes out of SBF’s mouth at this point increases the likelihood of tighter regulations in the space. crypto, both in the U.S. and elsewhere, and token prices will likely remain under pressure as fears of the regulatory hammer drop loom.”
In a conversation with a Vox reporter published last week, Bankman-Fried partly blamed FTX’s collapse on “messy bookkeeping,” regretted his decision to file for bankruptcy, and disparaged U.S. regulators in crude terms. He later said he had no intention of making the conversation public.
Data from CoinShares also showed bitcoin saw inflows of $14 million, but when offset by inflows into short-term investment products, net flows were negative by $4.3 million. of dollars. The AUM on short bitcoin was $173 million, not far off a high of $186 million,
There were minor outflows of $800,000 for Ethereum, the second largest blockchain network. Investors poured record $14 million inflows into short Ethereum products.
There have been a slew of releases on most altcoins, including Solana, XRP, Binance, and Polygon.
Reporting by Gertrude Chavez-Dreyfuss in New York Editing by Matthew Lewis
Our standards: The Thomson Reuters Trust Principles.