exchange data shows asset managers – a particular group of institutional investors including pension funds – are using CME bitcoin futures to place a growing size of “short” positions, which bet on a decline in bitcoin price.
To give some context on what could happen next, bitcoin price stabilizes at a lower level and asset managers would then adopt a neutral position closing shorts and/or would assume a new bitcoin bullish position.
If CME market participants anticipated a rise in Bitcoin prices, it would be very likely that both open interest and trading activity would be increasing.
Far from signaling a lack of interest in bitcoin or cryptocurrencies, a Forbes analysis of institutional trading behavior suggests that this latest asset manager short selling is a tactical move of a temporary duration until buying interest is again broad and strong from new market participants.
Prior to my analyst days, I was head of sales for Interbank FX, a fast-growing brokerage firm that was ranked #46 in 2008 by INC magazine.