Hedge Funds Flip Long on CME Bitcoin Futures Amid Rising Optimism
Hedge funds trading Bitcoin (BTC) futures on the Chicago Mercantile Exchange (CME) have made a rare shift, turning net long according to Ki Young Ju, CEO of blockchain data analytics firm CryptoQuant. This move suggests professional traders are increasingly betting on Bitcoin prices rising.
Historically, hedge funds have remained net short CME Bitcoin futures due to the basis trade, a market-neutral strategy where traders buy spot Bitcoin or exchange-traded funds (ETFs) while simultaneously selling futures. This activity has kept hedge funds' reported futures positioning negative for years.
The shift in position is significant as it indicates that hedge funds are abandoning their traditional short positions to bet on an upside in Bitcoin prices. Ki Young Ju noted, 'You cannot run a traditional carry trade with an aggregate net-long futures position.'