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Investors buy Bitcoin dips while Evergrande implosion roiling stock markets

The Evergrande debacle appears to be driving the global stock market correction, but data suggests that professional traders are still buying the BTC decline. Increasing speculation that China’s second-largest property developer, Evergrande Group, will default on its $300 billion in debts has Bitcoin (BTC) investors apprehensive.

These concerns are reflected in global equity markets, which are down 1.5 percent to 3 percent at market open this morning. Despite the price fluctuation, the outflow of BTC from exchanges (net withdrawals) has continued a multi-month trend, particularly on Coinbase Pro.

Traders are also aware that each exchange has its user profile. When opposed to FTX, which is recognized for having a more conservative clientele, liquidations on By bit are more dramatic.

Professional traders are still neutral to optimistic

The futures premium can be used to determine how bullish or bearish professional traders are (or basis rate). The differential between longer-term futures contracts and current spot market levels is measured by this indicator. A 5–15 percent yearly premium is expected in strong markets, which is referred to as contango. This price disparity is generated by sellers requesting more money to defer settlement for longer.

Bitcoin 3-month futures annualized basis

Image Source: Coin Telegraph

Backwardation, or the fading or becoming negative of this indication, triggers a red alert. The current 7 percent annualized premium is neutral, but in line with the preceding month’s average, as seen above. This signal would have flipped below 5 percent if pro traders become scared or bearish.

Investment flows into crypto products totaled $42 million in the week ending September 19, according to digital asset management firm CoinShares, with $15 million moving into Bitcoin funds. For the third time in 16 weeks, BTC investment products have seen positive inflows.

Investors bought $6.6 million worth of Ether (ETH) products and $3.7 million worth of multi-asset funds this week, increasing the value of all main assets. Investors also put $4.8 million into Solana (SOL), despite a denial-of-service interruption caused by network congestion earlier this week. With $28 million in weekly inflows, 21Shares was the product with the most inflows.

The producer of physically-backed crypto exchange-traded products now manages $1.87 billion in assets. With $43.177 billion in total assets, Grayscale remains the largest crypto asset, manager.

Since the beginning of the global stock market recovery at the end of July, money managers have bought up crypto. The cryptocurrency market peaked last week at $2.2 trillion after plunging to around half that amount earlier in mid-July. By Monday, all major crypto assets had printed heavy losses as Chinese Evergrande news shook risk sentiment.

In the bitcoin market, institutional investors have become big players, signaling that digital assets are becoming more broadly recognized. Some of the crypto’s top asset managers told Cointelegraph earlier this year that investing in digital assets no longer poses the same amount of professional risk as it once did, meaning that more financial advisors and wealth managers will enter the market.

A recent poll conducted by London-based crypto fund Nickel Digital Asset Management indicated that the majority of hedge fund executives have already invested in cryptocurrencies.

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Also read: Harmony: Everything you need to know



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