Hedge Funds Turn Net Long on Bitcoin CME Futures, Abandoning Short Bets

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Leveraged hedge funds on the Chicago Mercantile Exchange have shifted their bitcoin futures positions from net short to net long, marking a rare reversal in their typical stance. The change comes as futures yields have weakened significantly, eroding the profitability of the once-popular basis trade strategy. The basis trade involved funds simultaneously shorting futures while holding spot bitcoin to capture the yield spread between the two. With that spread now compressed, the structural incentive to maintain short futures positions has largely disappeared. As a result, hedge funds appear to be repositioning to directly benefit from a potential bitcoin price rally.

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