Bitcoin's Bearish September Has Kneecapped Crypto ETP Activity: Report

Sep 25, 2020 at 14:25 UTC.Bitcoin's bearish price performance this month has prompted investors to pull out of some crypto derivatives products, with trading volumes taking a nosedive as a result.

A CryptoCompare report published Thursday shows volumes for cryptocurrency-based exchange-traded-products have fallen to a fraction of what they were in August.

August had been a record month for crypto derivatives generally, as CoinDesk reported at the time.

CryptoCompare's report doesn't include volumes from products that run on unregulated derivative providers, such as BitMEX or Binance.

Market leader Grayscale saw volumes for its Bitcoin Trust fall to just $40 million a day.

Crypto derivatives track the price performance of selected digital assets, usually bitcoin, through a product that's tradeable on regulated stock exchanges.

Constantine Tsavliris, CryptoCompare's head of research, told CoinDesk investors may have been put off as bearish market sentiment grew.

In the first week of September, bitcoin fell from $12,000 to $10,000, but has since recovered to trade around $10,613 at press time, according to CoinDesk data.

The Fear and Greed Index, a consolidated sentiment tool for digital assets, is currently at 46, suggesting traders are still mildly bearish.

"ETP investors generally invest long-term, and therefore the recent drop in price combined with a generally bearish market has likely encouraged more cautious trading activity," Tsavliris said.