CoinShares

Bitcoin the ‘main beneficiary’ as crypto funds notch 10-week streak

Nearly $1.8 billion flowed into crypto investment products over the last 10 weeks, which hasn’t been seen since Bitcoin futures were launched in October 2021.

Bitcoin (BTC)-related investment products have become the “main beneficiary” of recent investor interest in crypto amid growing anticipation of a spot Bitcoin exchange-traded fund (ETF) approval in the United States.

A total of $1.76 billion of investors’ funds have flowed into crypto products over 10 weeks, making up the most significant inflows over such a period since October 2021 when Bitcoin futures launched, according to a Dec.

CoinShares’ weekly reports over the past 10 weeks show that at least $1.44 billion of inflows went to Bitcoin investment products over the period, with the price of Bitcoin jumping from $26,600 to $37,700 during the period.

Meanwhile, the week ending Dec. Bitcoin investment products were the “main beneficiary,” said Butterfill, recording $132.8 million of inflows over the past week, while Ether (ETH) and Solana (SOL) products tallied $30.8 million and 4.3 million, respectively.

Digital asset flows (in millions) week by week in 2023. Source: CoinShares

Related: Bitcoin prices should ‘logically’ correct in January, but crypto’s a ‘wild card’

The inflows come as spot Bitcoin ETF applications are inching closer toward potential approval in the United States.

Read more

Crypto investment products see largest outflows on record amid SVB collapse

Fear and trepidation spread across the crypto market last week following the high-profile collapses of Silvergate Bank and Silicon Valley Bank.

Cryptocurrency investment products lost 10% of assets under management last week as institutional investors rushed for the exit during the latest episode of market volatility prompted by the Silvergate and Silicon Valley Bank collapses.

Digital asset investment products registered $255 million in outflows for the week ending March 12, marking the fifth consecutive weekly decline and the largest seven-day drop on record, according to CoinShares. The 10% drop in assets under management, or AUM, retraced all the gains in 2023.

As the largest and most influential crypto asset, Bitcoin (BTC) witnessed a $244-million drawdown. Ether (ETH) products lost $11 million in AUM, while multi-asset funds gained $2.2 million.

Year-to-date flows are now negative for Bitcoin, Ether and multi-asset funds. Although short-Bitcoin products registered minor outflows last week, these assets have seen $49 million in total inflows this year.

Investors were on edge last week after Silvergate Bank, a crypto-friendly financial institution, announced that it would unwind its operations and liquidate all remaining assets. Earlier in the month, Silvergate announced it would delay filing the necessary paperwork with the United States Securities and Exchange Commission, prompting widespread fears about its financial position. Like other companies, Silvergate’s problems stemmed from its involvement with the now-failed FTX cryptocurrency exchange.

Related: Crypto Biz: Silvergate shutting down, Alameda suing Grayscale

Adding to last week’s chaos was the sudden closure of Silicon Valley Bank (SVB), a financial institution with deep ties to crypto-focused venture capital funds. Although the bank was allowed to fail, the Federal Reserve, U.S. Treasury and Federal Deposit Insurance Corporation confirmed over the weekend they would guarantee all SVB deposits.

The resolution to the SVB collapse seems to have shored up confidence in the crypto sector, leading to broad market rallies for Bitcoin and other crypto assets. Bitcoin’s price reached as high as $24,639 on March 13 after falling below $20,000 last week, according to data from Cointelegraph Markets Pro.

US regulatory crackdown leads to $32M digital asset outflows: CoinShares

Institutional investors are feeling the heat as the SEC targets all aspects of the crypto industry in the United States.

Institutional investors may have gotten the jitters on crypto in the wake of the regulatory crackdown in the United States, with digital asset investment products seeing the largest weekly outflow of 2023. 

On Feb. 20, institutional crypto fund manager CoinShares reported that digital asset investment products saw outflows totaling $32 million last week, the largest outflow of the year.

The outflow comes in the wake of a massive crackdown on the digital asset industry in the U.S., which has targeted everything from staking services to stablecoins to crypto custody as the Securities and Exchange Commission ramps up what industry analysts have dubbed its war on crypto.

Outflows hit $62 million midway through last week but slowed by the end of it as sentiment improved, added CoinShares analyst James Butterfill.

The majority of those outflows, or 78%, were from Bitcoin (BTC) related investment products and there was an inflow of $3.7 million to Bitcoin short funds. The firm blamed the regulatory crackdown for the increased outflows.

“We believe this is due to ETP investors being less optimistic on recent regulatory pressures in the US relative to the broader market.”

However, negative sentiment from institutional investors was not mirrored by the broader markets, which saw a 10% gain for the period. This pushed total assets under management for institutional products to $30 million, the highest level since August, Butterfill said.

There were also outflows for Ethereum (ETH) and mixed-asset funds but blockchain equities bucked the trend with inflows totaling $9.6 million for the week.

Related: Digital asset investment products see highest inflows since July 2022: Report

Institutions started pouring capital back into crypto funds in January with inflows for the last week of the month totaling $117 million, reaching a six-month high.

However, funds have seen outflows for the past fortnight following four weeks of inflows in January.

The regulatory enforcement action responsible for the sentiment shift includes the SEC’s charges against Kraken for its staking services on Feb. 9. A few days later, it sued Paxos over the minting of Binance USD (BUSD), and it also last week proposed changes targeted at crypto firms operating as custodians.

Crypto investment firm CoinShares debuts trading on Nasdaq Stockholm

CoinShares’ stock was previously listed on the Nasdaq First North Growth Market, an alternative stock exchange for small and medium-sized companies.

Major cryptocurrency investment firm CoinShares has debuted trading on Nasdaq Stockholm, the primary securities exchange of the Nordic countries.

CoinShares officially announced on Dec. 19, the first day of trading on Nasdaq Stockholm’s main market, with CoinShares’ stock starting trading on the exchange under the ticker CS.

The latest trading debut marks a change of listing venue for CoinShares’ stocks. Previously, CS shares were traded on the Nasdaq First North Growth Market, an alternative stock exchange for small and medium-sized companies in Europe. CoinShares first went public by listing its shares on the Nasdaq First North Growth Market in March 2021.

According to the latest announcement, there is no offering or issuance of new shares in connection with the CoinShares’ shares being admitted to trading on Nasdaq Stockholm.

“Shareholders of CoinShares do not need to take any action in connection with the change of listing venue,” the company noted.

According to CoinShares CEO Jean-Marie Mognetti, the change in trading venue aims to emphasize the company’s commitment to developing the firm into the “leading full-service digital asset investment and trading group.” He stated:

“We believe the change in listing venue will allow us to benefit from increased visibility and investor exposure while supporting our ambition to grow our market share.”

Nasdaq’s head of European listings Adam Kostyál expressed confidence in the “increased opportunities” of the uplisting. “We look forward to seeing the company’s further growth and development supported by increased investor visibility and international exposure within the cryptofinance community,” Kostyál added.

CoinShares’ initial public offering was conducted in March 2021 at a fixed price of 44.9 Swedish kronor (SEK), or $5.3 per share. According to data from TradingView, CS stock surged to an all-time high of 115 SEK, or $11, in April 2021 and has been gradually decreasing since.

Related: Nasdaq warns Bitcoin mining firm Bitfarms about share price deficiency

At the time of writing, CS shares trade at 21 SEK ($2), down about 2% since the trading debut on Nasdaq Stockholm.

CoinShares stock all-time price chart. Source: TradingView

CoinShares’ change of trading venue comes amid the ongoing cryptocurrency market crisis triggered by the failure of the FTX crypto exchange.

As previously reported, CoinShares has not been significantly impacted by the FTX contagion due to the company’s limited exposure to the FTX exchange. CoinShares said that its overall exposure to FTX amounted to $31.5 million, assuring that the firm’s financials remain strong.

FTX crisis leads to record inflows into short-investment products

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-Ether (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 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 asset-under-management (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.

Related: FTX will be the last giant to fall this cycle: Hedge fund co-founder

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.

Amid FTX collapse, crypto funds see largest inflows in 14 weeks

The Bitcoin price briefly fell below $16,000 last week as Sam Bankman-Fried’s FTX Group filed for bankruptcy.

Inflows into cryptocurrency investment products rose sharply last week as institutional investors bought the dip amid the marketwide collapse triggered by FTX and Alameda Research’s bankruptcies. 

Digital asset investment products saw inflows totaling $42 million in the week ending Nov. 13, the largest increase in 14 weeks, according to CoinShares data. Bitcoin (BTC) investment products saw the largest inflows at $19 million, followed by multiasset and Ether (ETH) funds at $8.6 million and $5.9 million, respectively.

Investors were also betting on a further deterioration in market conditions, with short Bitcoin products registering $4.8 million in weekly inflows.

Net inflows were recorded across all major regions, led by the United States ($29 million), Brazil ($8 million) and Canada ($4.3 million).

Although investors were buying into crypto investment products, their outlook on blockchain equities soured. CoinShares data revealed that blockchain equities registered $32 million in weekly outflows, the largest since May. Meanwhile, the broader equity market recorded its best week of gains since March, with the technology-heavy Nasdaq Composite gaining 8.1% on weaker-than-expected inflation numbers.

Related: Crypto Biz: Crypto’s day of reckoning has arrived

The cryptocurrency market faced renewed sell-side pressure last week as Sam Bankman-Fried’s FTX exchange filed for bankruptcy following a run on its assets. The bank run was triggered by Binance’s sudden liquidation of FTX Token (FTX) on Nov. 6. Binance CEO Changpeng Zhao expressed interest in buying out the collapsing derivatives exchange but backed out less than 24 hours later due to an apparent hole in FTX’s finances. It has since come to light that FTX is sitting on roughly $8 billion in liabilities.

Crypto prices appear to have stabilized following last week’s rout, with Bitcoin currently hovering just north of $16,500, according to Cointelegraph’s BTC price index. Market sentiment, however, could take months or even longer to recover.

Investors increasingly confident of Ripple’s victory over SEC: CoinShares

XRP investment products have seen a third consecutive week of inflows, suggesting investors may be increasingly confident of Ripple’s victory.

Recent developments in the Ripple vs. Securities and Exchange Commission (SEC) case appear to have bolstered investor confidence in XRP (XRP)-tied investment products, according to investment data from CoinShares’ head of research, James Butterfill. 

In its latest Digital Asset Fund Flows published on Nov. 7, Butterfill noted that XRP investment products have seen a third consecutive week of institutional inflows, clocking $1.1 million.

Butterfill said the figures imply “improving investor confidence as the SEC case against Ripple looks increasingly fragile.”

The last few weeks have seen Ripple Labs gaining increasing support from heavy hitters in the crypto industry including Coinbase and the Blockchain Association. 

In a Nov. 4 post, General Counsel for Ripple Stuart Alderoty announced to his 89,000 followers that, “A dozen independent voices – companies, developers, exchanges, public interest and trade assoc’s, retail holders” had offered their help to explain how “dangerously wrong the SEC is.”

Other entities in support of Ripple include nonprofit organization Investor Choice Advocates Network, crypto mobile app SpendTheBits and the Crypto Council for Innovation, as well as the XRP “decentralized community.”

In total, there are 12 independent entities pledging legal support for Ripple.

However, despite the support and both sides calling for a summary judgment, the case could still take months, according to Ripple CEO Brad Garlinghouse, who spoke at DC Fintech Week on Oct. 11.

Garlinghouse speculated that the case could be wrapped up by the first half of 2023, but admits that is only a guess.

Related: Judge rules LBRY video platform’s token is a security in case brought by the US SEC

A recent ruling by the United States District Court in favor of the SEC against blockchain-based file-sharing and payment network LBRY could complicate the Ripple case as well. 

Jeremy Hogan, Partner at Hogan & Hogan, told his 238,000 followers he expects the results of his case to “make its way into the SEC’s final brief in the Ripple case.”

Crypto lawyer John Deaton appears to still be bullish about Ripple’s chances of winning the case.

In a Twitter post, Deaton said the recent ruling “doesn’t shake my confidence AT ALL,” teasing a lengthier explanation for his 224,000 followers on Nov. 8. 

CoinShares’ Twitter bot gives a ‘fair price’ on NFTs, some disagree

The bot is based on an algorithm that is focused on aggregating different data sets from OpenSea to determine the supposed “fair price” of an NFT.

Digital asset manager CoinShares has launched an experimental Twitter bot that will, in theory, enable users to check the estimated fair market value of specific nonfungible tokens (NFTs), though a few have been less than enthused about the estimates given. 

The firm announced the bot dubbed “CoinSharesNFTAI” via Twitter on Oct. 13 and outlined that its algorithm is focused on aggregating different data sets from OpenSea to determine the supposed “fair price” of an NFT.

In the Twitter thread, CoinShares said: “Pricing NFTs is no easy task” as their value is volatile and millions of them are available on the market, including ones with no trading history.

Some users weren’t so impressed by the NFT value estimates, such as Goblin Town NFT hodler Jack Hermes (@systemic_bliss), commenting that CoinShares’ “model sucks” after it valued the NFT he bought for 2.694 Ether (ETH) at just 0.88 ETH, while another said it “seems to be a bit off” as the NFT in question was valued at 0.28 ETH by the bot despite having a floor of 0.48 ETH and a bid of 0.63 ETH. 

Cointelegraph tried the bot using Seth Green’s well-known NFT BAYC #8398, which was recovered by Green in June for a $260,000 ransom after it was stolen by a hacker. The NFT currently has a “best offer” of 70.6 ETH on Opensea and was valued at 79.65 ETH by the Twitter bot, worth $106,000 at the time of writing. 

There are around 50 NFT projects on OpenSea supported at this stage, including blue chips such as the Bored Ape Yacht Club, Goblin Town, Pudgy Penguins and Cool Cats.

All of them are listed under the collections available this week, suggesting there is a weekly rotating list of supported collections. 

The newly launched bot comes only days after the digital asset manager published a report on constructing an NFT price index, which its NFT bot is based on. In the report, quantitative trading analysts Yanis Bakhtaoui and Hugo Schnoering noted that:

“ERC-721 tokens are uniquely identified by an id and a set of properties, and cannot be interchangeable or divisible. This property makes these assets hard to price, as each NFT is unique.”

“These properties make the NFT market inherently illiquid: it is related to ask and bid, and if an owner does not want to sell his NFT, no one will be able to buy the same,” they added.

The report also outlines that market manipulation tactics such as wash trading — fraudulent transactions designed to pump prices — have had a key impact on NFT pricing.

Related: Uniswap Labs raises $165M as attention shifts to NFTs, Web3

To use the bot, people just need to tweet @CoinSharesNFTAI and provide a link to the token on OpenSea. It is not clear if other marketplaces will be supported moving forward.


CoinShares’ Twitter bot gives a ‘fair price’ on NFTs… or does it?

The bot is based on an algorithm that is focused on aggregating different data sets from OpenSea to determine the supposed “fair price” of an NFT.

Digital asset manager CoinShares has launched an experimental Twitter bot that will, in theory, enable users to check the estimated fair market value of specific nonfungible tokens (NFTs), though a few have been less than enthused about the estimates given. 

The firm announced the bot dubbed CoinSharesNFTAI via Twitter on Oct. 13 and outlined that its algorithm is focused on aggregating different data sets from OpenSea to determine the supposed “fair price” of an NFT.

In the Twitter thread, CoinShares said, “Pricing NFTs is no easy task,” as their value is volatile and millions of them are available on the market, including ones with no trading history.

Some users weren’t so impressed by the NFT value estimates, such as Goblin Town NFT hodler systemic_bliss, commenting that CoinShares’ “model sucks” after it valued the NFT he bought for 2.694 Ether (ETH) at just 0.88 ETH. Meanwhile, another said it “seems to be a bit off,” as the NFT in question was valued at 0.28 ETH by the bot despite having a floor of 0.48 ETH and a bid of 0.63 ETH. 

Cointelegraph tried the bot using Seth Green’s well-known NFT Bored Ape Yacht Club (BAYC) #8398, which was recovered by Green in June for a $260,000 ransom after it was stolen by a hacker. The NFT currently has a “best offer” of 70.6 ETH on OpenSea and was valued at 79.65 ETH by the Twitter bot, worth $106,000 at the time of writing. 

There are around 50 NFT projects on OpenSea supported at this stage, including blue chips such as the BAYC, Goblin Town, Pudgy Penguins and Cool Cats.

All of them are listed under the collections available this week, suggesting there is a weekly rotating list of supported collections. 

The newly launched bot comes only days after the digital asset manager published a report on constructing an NFT price index, which its NFT bot is based on. In the report, quantitative trading analysts Yanis Bakhtaoui and Hugo Schnoering noted that:

“ERC-721 tokens are uniquely identified by an id and a set of properties, and cannot be interchangeable or divisible. This property makes these assets hard to price, as each NFT is unique.”

“These properties make the NFT market inherently illiquid: it is related to ask and bid, and if an owner does not want to sell his NFT, no one will be able to buy the same,” they added.

The report also outlines that market manipulation tactics such as wash trading — fraudulent transactions designed to pump prices — have had a key impact on NFT pricing.

Related: Uniswap Labs raises $165M as attention shifts to NFTs, Web3

To use the bot, people just need to tweet CoinSharesNFTAI and provide a link to the token on OpenSea. It is not clear if other marketplaces will be supported moving forward.


CoinShares’ Butterfill suggests ’continued hesitancy’ among investors

Matrixport’s head of strategy said he believes the market is currently in a “wait-and-see environment” but could shift after the U.S. mid-term elections in November.

Minor inflows for digital asset investment products over the last few weeks suggest a “continued hesitancy” toward crypto among institutional investors amid a slowdown in the United States economy. 

In the latest edition of CoinShares’ weekly “Digital Asset Fund Flows” report, CoinShares head of research James Butterfill highlighted stand-offish institutional sentiment toward crypto investment products, which saw “minor inflows” for the third week in a row:

“The flows remain low implying continued hesitancy amongst investors, this is highlighted in investment product trading volumes which were US$886m for the week, the lowest since October 2020.”

Between Sept. 26 and Sept. 30, investment products offering exposure to Bitcoin (BTC) saw the most inflows at just $7.7 million, with Ether (ETH) investment products close behind with $5.6 million worth of inflows. Short BTC products represented the only other notable inflows of $2.1 million.

These inflows were offset by more than $3.5 million worth of outflows for investment products offering exposure to altcoins such as Polygon (MATIC), Avalanche (AVAX) and Cardano (ADA), while multi-asset and Solana (SOL) funds also shed $700,000 and $400,000 during that week, respectively.

Commenting on the current state of the crypto market, and the institutional outlook of late, Markus Thielen, head of research and strategy at Singapore-based crypto financial services platform Matrixport, noted that:

“The market is currently in a wait-and-see environment whereas a potential positive shift after the US Mid-Term elections could have significant regulatory changes.”

“Last night’s US economic data, notably the ISM index, showed that growth has materially slowed down in the US economy and there is now the possibility that the Fed will become less hawkish. The USD rally appears to have lost one of its key drivers and this could signal a pause in rate hikes. This could be very bullish for digital assets into year-end,” he added.

Looking at the month-to-date (MTD) flows as of Sept. 30, ETH products have been the most offloaded by institutional investors despite the Merge going through on Sept. 15, with $65.1 million worth of outflows.

“Looking back, the Merge was not good for sentiment with outflows totaling US$65m in September. Increased regulatory scrutiny and a strong US Dollar being the likely culprits as the shift to Proof of Stake was executed successfully,” said Butterfill. 

In contrast, Short BTC funds and BTC investment products saw minor inflows of $15.2 million and $3.2 million MTD.

Crypto ETF outflows slowing

While there has been limited action of late for crypto investment products tracked by CoinShares, Bloomberg Intelligence has observed a notable trend in crypto exchange-traded funds (ETFs).

Related: A crumbling stock market could create profitable opportunities for Bitcoin traders

According to Bloomberg Intelligence data, institutional investors offloaded $17.6 million from crypto ETFs during Q3 2022, providing a stark contrast to the “record $683.4 million withdrawn from such funds” in Q2 2022.

“The outflows mainly took place in the past two months. In July, investors poured upwards of $200 million into crypto ETFs,” Bloomberg noted in a Sept. 30 article, adding that the decreased outflows were likely due to “narrow fluctuations” in crypto prices during Q3.