Hedge funds increase bearish position in CME Micro Bitcoin Futures to highest level since 2021

Quick Take

Data from The Block shows that hedge funds have taken a notable bearish stance on Bitcoin, holding the largest net short positions in CME Micro Bitcoin Futures since the end of 2021. These micro contracts, each representing 0.1 BTC, cater to traders seeking precise exposure with lower capital requirements than standard CME Bitcoin Futures, representing 5 BTC per contract.

Hedge Funds Increase Short Positions Despite Bitcoin’s Price Surge

The chart from The Block indicates that hedge funds have markedly increased their short positions in micro contracts, reflecting a cautious or bearish outlook despite Bitcoin’s strong year-to-date price performance, which saw it rise from $40,000 to over $68,000. Hedge funds were also at similar short levels during Bitcoin’s all-time high in March. In contrast, other trader categories, like asset managers and non-reported traders, maintain relatively stable positions.

The increased hedge fund shorting in micro futures suggests they are hedging against potential downside risks, even as the spot market shows bullish sentiment.

Hedge Funds Maintain Muted Long Positions

If we look at the inverse, hedge funds’ long positions in CME Micro Bitcoin Futures remain relatively muted compared to the levels during Bitcoin’s all-time high in March, according to data from The Block.

Data from Coinglass shows that the aggregate total open interest in CME Bitcoin futures is roughly $11 billion, encompassing both micro and standard contracts. CME is the leading exchange for Bitcoin futures trading.

Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.

Subscribe

Related articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here