Hedge Funds Abandon Structural Shorts on CME to Bet on Bitcoin Rally
Leveraged funds on the Chicago Mercantile Exchange have flipped to a net-long bitcoin position as declining futures yields dismantle the basis trade.
Leveraged funds trading on the Chicago Mercantile Exchange (CME) have shifted from structural short positions to net-long exposure on bitcoin, marking a notable change in institutional positioning.
For an extended period, institutional investors favored a structural short posture on CME bitcoin futures to capture the basis trade—exploiting the price spread between spot markets and dated futures contracts. However, recent compression in futures yields has undermined the mechanics of this strategy, reducing its profitability and prompting market participants to unwind existing short allocations.
The transition to net-long positioning reflects a broader adjustment in institutional derivatives strategies as market dynamics evolve. The softening of futures yields has removed the primary incentive for maintaining the basis trade, leading funds to abandon the strategy in favor of directional long exposure.
Marcus reports on digital assets, from spot ETF flows to protocol-level developments in DeFi. He pays particular attention to how institutional adoption is reshaping crypto market structure.
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