WSJ Report: Data Shows Large Traders Might Be Shorting CME Bitcoin Futures
- There are 14% more short positions than long at the CME Bitcoin futures
- Bitcoin has recently surpassed $13,000
According to data provided by the Commodity Futures Trading Commission (CFTC), there are large investors with open short positions at the Chicago Mercantile Exchange (CME). There are other firms that are also holding three times more short positions than long.
Data Shows Traders Are Shorting CME Bitcoin Futures
As the price of the most popular digital asset grows, there are more investors ready to enter the market and place their funds in the space.
Due to this fast price increase, there are also more short sellers that consider that the price of the most popular digital asset could eventually fall in the near future before continuing its positive path.
In general, when the price of an asset surges parabolically, short-sellers appear and place their bets against the market. According to data provided by the CFTC and The Wall Street Journal, leveraged funds have more short positions open than long.
At the moment, the CME is one of the only ways to short Bitcoin, and this is why there might be so many short positions currently opened. Indeed, it seems that the market is more bullish than what the CME Bitcoin futures show. About it, The Wall Street Journal wrote:
“CME right now is providing a unique ability for the larger players to have massive short positions with very low counterparty risk.”
At the moment, there are several institutions that are getting prepared in order to offer Bitcoin futures trading for investors to have access to the market. If that happens, the bearish bias that the CME has could eventually end or, at least, be reduced in the future.
Another explanation could be that these investors are currently hedging exposure to any long Bitcoin positions they currently hold, which is very common in volatile commodity markets. However, this is usually done and performed by commercial hedgers rather than large investors.
Back on June 11, there were 47% more bearish positions opened than bullish. The number of short positions compared to long is getting smaller. The latest data suggests that there is just a 14% gap between shorts and longs.
According to CoinMarketCap, Bitcoin is currently being traded around $12,640 and it has a market capitalization of $224.8 billion.