With bitcoin prices briefly dipping below $30,000 on Tuesday and various investors seeing a downslide to possibly $20,000, a growing number of asset managers have begun betting on a short-term rise on the cryptocurrency at the CME.
The latest CFTC data for Jun 15 shows asset managers having 517 long bitcoin futures contracts, which bet on a rise in bitcoin prices, a 35% increase over the previous week. The last time asset managers had more than 500 long futures contracts was in Q4 2020 when bitcoin prices initiated a string of record highs.
The growth in bullish bets has been so sudden that this group is almost back to a net neutral position despite being heavily bearish over the last few months. For context, this group was the first to slowly start shorting the asset back in late January at the exchange, as bitcoin raced past $35,000. They became net-short on February 23 following a tumble in bitcoin price from $58,400 to $44,900 and stayed that way as bitcoin lost 50% of its value.Asset managers are placing more bullish bets on bitcoin CFTC, Forbes Asset managers have almost become net neutral at the CME CFTC, Forbes
In fact, asset managers have become the least-bearish segment at the CME.Asset managers are the least-bearish investing group at the CME CFTC, Forbes
This begs the question, why did a group of sophisticated and experienced investors suddenly boost their long bets on bitcoin?
First, it is worth noting that asset managers as a group have some unique investment traits. They do not show the always-long or always-short behavior of other market participants, making them more opportunistic and often contrarian traders, especially in highly cyclical industries. After bitcoin had its record high of $64,900 on April 14, asset managers were quick to boost their short positions and profited handsomely as bitcoin correc...