Reference: See hereIn The News:
New data from market intelligence firm Kaiko Analytics shows that hedge funds are net short on Bitcoin ( BTC ) and Ethereum ( ETH ) on the Chicago Mercantile Exchange (CME).
In a new research article, the crypto analytics platform says that while hedge funds are net short on both BTC and ETH on the CME, it does not mean the funds are bearish on crypto, but rather, that they are engaging in basis trades, a type of arbitrage strategy.
Net short means that the hedge funds have accumulated more short positions than long positions in the crypto derivatives markets.
This protects against price moves and guarantees a specific sale price in the event of volatility in the underlying asset. The long basis trade works best when prices are in a state of contango, which means futures prices are above spot prices. The two prices will trend towards one another as expiration nears.
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