Popular Hedge-Fund Trade Pushes Bitcoin-Futures Shorts to Record

Bitcoin futures are seeing a record high in net short interest among leveraged funds, yet don’t mistake that for an overwhelming sense of bearishness among hedge funds. It’s more likely due to an increasingly popular market-neutral strategy.

What’s known as the basis trade, a strategy which seeks to profit between discrepancies in spot and futures markets, likely accounts for much of the short interest of almost 18,000 CME Bitcoin futures contracts, according to experts.

“The popularity of the basis trade can be observed through the short interest on CME BTC futures held by hedge funds,” said Ravi Doshi ...