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Investors used the crypto crash after China's ban to buy the most bitcoin in four months last week: CoinShares

Markets Insider
Markets Insider
 24 days ago

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Bitcoin and China
  • Investors put $50.2 million into assets backed by bitcoin in the week to September 24, the highest since April, CoinShares said on Tuesday.
  • Ether-backed assets saw $28.9 million worth of inflows, the most since early June.
  • The continued inflows suggest investors saw China's ban last week as a buying opportunity and not a deterrent.
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Investment in bitcoin hit its highest in four months in the week to September 24, when China announced it would ban trading and mining of cryptocurrencies, triggering an aggressive sell-off that traders used as a buying opportunity, according to CoinShares' weekly report on Monday.

Assets backed by bitcoin drew in the most investment, with inflows of $50.2 million over the week ending September 24, the most since the week of April 19, the data showed.

There was also $28.9 million worth of inflows for assets backed by ether, the most since June 7. Solana-backed assets saw inflows worth $3.9 million and cardano-backed products registered inflows of $2.6 million.

These inflows continued despite China's clear ban on all crypto-related activities on the mainland on Friday that resulted in a steep drop in crypto prices. Bitcoin fell almost 6% to below $42,000 and ether tumbled almost 8% to hover around $2,800 before steadily recovering in the days following.

"The continued inflows suggest the recent headwinds for digital assets, such as the widened China ban, were seen as buying opportunities for investors," the report said.

Over the month so far, bitcoin has seen $100.9 million worth of inflows, solana has seen $59.8 million worth of inflows. Ether assets have grown by $35.1 million, with the majority coming in last week.

One of the side-effects of China's ban was a swell of buying in tokens attached to decentralized exchanges, which do not rely on any kind of intermediary and which market watchers said would benefit particularly from Chinese users looking to circumvent the existing restrictions.

So-called "DEX tokens" like uniswap, sushi or pancake, surged on Monday, in some cases by as much as almost 40%. Most of these platforms run on the ethereum network so, investors have tapped into this by betting heavily on the blockchain's ether token.

"Sentiment has remained relatively buoyant for ethereum as the amount staked to Eth2.0 progresses," the report said.

Read the original article on Business Insider

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