CME Hedge Funds Flip Net Long on Bitcoin Futures

Hedge funds on the Chicago Mercantile Exchange have flipped to a net long position in Bitcoin futures, according to Ki Young Ju, founder and CEO of CryptoQuant.

This marks a significant shift from their traditional basis trade strategy, where they would buy Bitcoin on the spot market and simultaneously short Bitcoin futures to pocket the difference between the two prices.

The basis trade has been under pressure as Bitcoin's spot and futures prices converge, reducing the profitable spread that makes this strategy worthwhile.

The net long positioning by leveraged funds can amplify upward price moves, but it also introduces new liquidation risk if the trade goes wrong.