Large Bitcoin Traders Turn Net Long
CFTC
data for Aug. 4 shows large reportable traders holding a combined net-long position of roughly 1,900 BTC across standard and Micro Bitcoin futures.
The group includes asset managers, dealers, leveraged funds, and other large reportable traders. Three of the four major categories are net long in standard Bitcoin futures.
Leveraged funds remain the exception, with a net short position equivalent to roughly 36,000 BTC in standard contracts. But their net short exposure has fallen sharply.
Yield from crypto basis trading is now lower than yield from Treasuries. Source: Glassnode
Across standard and Micro contracts, leveraged funds were about 58,600 BTC net short on May 5. By Aug. 4, the position had narrowed to about 35,800 BTC, a decline of nearly 40%.
Some of the unwind may reflect the fading appeal of the Bitcoin basis trade, in which hedge funds buy Bitcoin or spot ETFs while
shorting CME futures.
Glassnode
said in late July that three-month Bitcoin futures basis had trailed two-year Treasury yields since February, making the trade less attractive.
Still, the scale of the contraction is notable. CryptoQuant CEO Ki Young Ju has said leveraged fund net shorts have fallen by roughly half over the past year.
“Their structural short is clearly fading,” Ju
wrote on Aug. 11. “This likely includes both carry-trade unwinds and shifts in directional positioning.”
ETF Demand Is Starting To Return
Spot market demand is also improving.
US spot Bitcoin ETFs recorded five consecutive days of inflows from Aug. 3 through Aug. 7, attracting about $865 million,
according to Farside Investors. An outflow on Aug. 10 ended the streak.
US Spot BTC ETF flows are flipping positive. Source: Glassnode
The improvement follows months of weaker institutional demand. By late July, ETF flows had turned positive, downside hedges were falling, and large Bitcoin holders were accumulating again.
CoinShares said in an Aug. 7 report that three weeks of whale accumulation and five weeks of investment-product inflows suggested the cycle lows were probably already behind Bitcoin.
“The stabilization in ETF flows is the most encouraging development in that picture,” K33 Head of Research Vetle Lunde
wrote in a July 20 report.
Did Bitcoin Bottom at $58,000?
Bitcoin briefly fell toward $58,000 in late June before rebounding.
Since then, large CME traders have moved from slightly net short to modestly net long, leveraged funds have cut nearly 40% of net short exposure since May, and ETF inflows have returned.
The signal remains tentative. The aggregate CME net-long position is small, ETF flows remain volatile, and leveraged funds still hold a large short position.
Glassnode struck a similarly cautious tone in its Aug. 5 market report, saying stronger ETF demand or an upside volatility breakout would be needed to confirm the shift.
“The regime in one line: a compressed, under-owned market that global risk appetite has left behind, with bottom conditions assembling but incomplete,” Glassnode
said.
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