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Hedge funds flip to net long CME bitcoin futures as basis trade fades

CME leveraged funds have moved from net short to net long, after the annualized three-month futures basis fell to about 3% versus roughly 3.8% on two-year Treasuries.

Reported · Written up by our desk · Market Structure

Hedge funds trading CME bitcoin futures have shifted to an aggregate net long position, a rare change after years of structural net short positioning, according to CryptoQuant CEO Ki Young Ju and data cited by CoinDesk.

Ju said leveraged funds historically stayed net short CME Bitcoin futures because of the “basis trade,” which combines buying spot bitcoin or ETFs while selling futures, aiming to profit as the futures premium narrows.

CoinDesk reports that the strategy has become less attractive as the annualized three-month bitcoin futures basis has fallen to around 3.0%, below the yield available on two-year U.S. Treasury notes of about 3.8%, lowering incentives while adding funding, margin, and execution risk.

Bitcoin has recovered from around $58,000 in early July to trade above $65,000, and CoinDesk said the futures positioning shift supports the rebound narrative, with crossing into net long territory indicating longs exceed shorts for CME leveraged funds.

Latest closeBitcoin $65,069.46 ▲0.3%

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