Analysts at Glassnode have discovered that hedge funds are constructing up an more and more giant web brief place for Bitcoin.
Analysts say the cash-and-carry commerce may very well be one motive why ETF demand hasn’t resulted in the next bitcoin price.
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Posted June 11, 2024 at 11:11 pm EST.
The price of bitcoin is hovering round $67,500 regardless of spot bitcoin exchange-traded funds (ETFs) recording over two weeks of optimistic inflows. Whereas that 19-day influx streak ended on June 10, a rising bitcoin brief place might have one thing to do with the shortage of upward momentum for the main digital asset.
“Despite impressive US ETF inflows, a market-neutral Cash-and-Carry trade appears to be subduing buy-side pressure, requiring non-arbitrage demand to further stimulate price action,” wrote analysts at Glassnode within the agency’s newest weekly abstract of the crypto market.
A cash-and-carry commerce is an arbitrage technique the place merchants benefit from the mispricing between an underlying asset and its derivatives market. Basically, merchants concurrently take a protracted place in an asset and a brief place within the spinoff.
On this occasion, analysts at Glassnode noticed that merchants have turned to identify bitcoin ETFs as their instrument of alternative for lengthy publicity, however have additionally began accruing brief positions within the CME Group futures marketplace for bitcoin.
“We can see that entities categorized as hedge funds are building up an increasingly large net short position for bitcoin,” wrote Glassnode.
“At present, Hedge Funds are net short in both CME Bitcoin and Micro CME Bitcoin markets by $6.33B [billion] and $97M [million], respectively.”
Of their view, the magnitude of those cash-and-carry trades between lengthy US spot ETF merchandise and shorting futures through the CME Group trade has dampened the impact of buy-side inflows into ETFs and translated right into a impartial affect on market costs.
Over the past 24 hours, there have been $5 million price of bitcoin liquidations, with nearly all of these being brief positions, in accordance with information from CoinGlass. In complete, the crypto market noticed $250 million in liquidations over the interval.