Bitcoin has soared this week after Tesla CEO Elon Musk gave an endorsement to the cryptocurrency. Musk has been fighting for a long time between individual traders and Wall Street hedge funds, which have been “short” their GameStop shares, organized through Reddit’s WallStreetBets forum; It raised the price of bitcoin.
Now, the data is even as individual traders earn with Bitcoin and other cryptocurrencies; revealed that hedge funds have more than $ 1 billion BTC short, or short position.
— The Block (@TheBlock__) January 29, 2021
According to the data of the crypto news and analysis company The Block, hedge funds; Since the bitcoin price started to rise in October, it effectively bets that the price of the asset will go down.
According to the CFTC’s latest Financial Futures Investors report, the net short position in Bitcoin futures is the biggest position ever taken.
The bitcoin price has risen around 200 percent since October and climbed above $ 40,000 before falling slightly. The BTC rally was largely driven by institutional investors warming up to cryptocurrency and payment giants like PayPal that added BTC as payment support. However, “balloon” fears arose.
As hedge funds are increasingly betting against the Bitcoin price, which covers somewhat long positions; Traders powered by apps and bored of quarantine are speculating on Bitcoin and other stocks. Frederique Carrier, head of investment strategy at RBC Wealth Management, said in a note, “Being stuck at home due to quarantines and restrictions due to the epidemic; it seems to have encouraged the flow of daily traders, ”he said. He also used the following statements:
“INVESTORS ATTITUDE BE SHAPED BY HIGH GAINS ON THE AGENDA. FOR EXAMPLE, 5-TIMES INCREASE BY BITCOIN IN THE FIRST NINE DAYS OF 2021 FROM MARCH TO DECEMBER, MORE THAN 6-FLOOR INCREASE IN GAMESTOP SHARES… ”
The brokerage firm eToro has added 5 million users for the whole of 2020. However, this number was 1 million only in the first month of 2021. This shows that the demand for stock and cryptocurrency trading is growing rapidly among causal investors. Meanwhile, many in the Bitcoin and cryptocurrency community quickly encouraged the idea of retail traders fed up with restrictions to turn to crypto.
Nicholas Pelecanos, head of trade at the blockchain platform NEM, according to Forbes, commented:
“BY STOPING TRADE OF GAMESTOP AND NOKIA ASSETS BY ROBINHOOD AND CALLING NASDAQ CEO ADENA FRIEDMAN TO REGULATE INDIVIDUAL INVESTORS TO PREVENT THE COORDINATION IN SOCIAL MEDIA; THE STATUS OF CRYPTO CURRENCIES IS STRONGER. AS A RESULT OF THIS COLLISION, I BELIEVE THAT THE NEW WAVE OF INVESTORS COME ON BITCOIN AND OTHER LARGE CRYPTO CURRENCY ASSETS. “