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Hedge Funds Hold Record Short Bets on Bitcoin

Hedge Funds Hold Record Short Bets on Bitcoin

Hedge funds and commodities trading advisors increased their bearish bets on bitcoin futures to record levels at the end of the first quarter, according to a report citing the latest data from the Commodity Futures Trading Commission (CFTC).

Leveraged funds upped their short positions in the Chicago Mercantile Exchange’s (CME) standard bitcoin (BTC) futures contracts to 16,102, the highest level since they began trading in late 2017, according to latest CFTC data.

With each contract representing BTC5, institutions are apparently short more than BTC80,000, which is worth $5.4 billion at current rates, according to Coindesk.

This unprecedented increase in short wagers may imply a high interest from hedge funds in carry trade opportunities, as investors seek to capitalize on three-month futures premiums of more than 10% following bitcoin’s recent price slide from levels above $73,500 in March, noted Coindesk, citing Velo Data.

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About Joe Palmisano

Joe Palmisano is Editorial Director for Connect Money, where he brings nearly three decades experience of market insights as a financial journalist, analyst and senior portfolio manager for leading financial publications, advisory firms, and hedge funds. In his role as Editorial Director, Joe is responsible for the selection of content and creation of daily business news covering the financial markets, including Alternative Assets, Direct Investment and Financial Advisory services. Before joining Connect Money, Joe was a financial journalist for the Wall Street Journal, regularly publishing feature stories and trend pieces on the foreign exchange, global fixed income and equity markets. Joe parlayed his experience as a financial journalist into roles as a Senior Research Analyst and Portfolio Manager, writing daily and weekly market analysis and managing a FX and US equity portfolio. Joe was also a contributing writer for industry magazines and publications, including SFO Magazine and the CMT Association. Joe earned a B.S.B.A. in Finance from The American University. He holds the Chartered Market Technician (CMT) designation and is a member of the CFA Institute.