Who trades on CME? Funds hold more than 80% of short positions in CME Bitcoin

Editor's Note: This article comes fromBlock beats BlockBeats (ID: BlockBeats), reprinted by Odaily with authorization.

Editor's Note: This article comes from

Block beats BlockBeats (ID: BlockBeats)

Block beats BlockBeats (ID: BlockBeats)

, reprinted by Odaily with authorization.

A month ago, a Twitter user "Documenting Bitcoin" with close to 190,000 Twitter fans stated on Twitter that the hedge fund FRED Capital had a $7 trillion short position in Bitcoin.

Although the data of Documenting Bitcoin is not accurate, the $7 trillion is actually the total assets of FRED Capital. But it reminds us that we have to pay attention to a phenomenon: institutions' short positions in Bitcoin.

If you still have the impression, when the battle between retail investors and GamesStop short institutions was in full swing last month, some retail investors discovered that some institutions held a large number of Bitcoin short positions on the Chicago Mercantile Exchange (CME).

CME is currently the largest compliant bitcoin futures trading platform.

For compliant investment institutions, CME's futures contracts are one of the few channels that can use leverage to participate in Bitcoin investment.

For example, on January 20, 2021, two fund companies under BlackRock, "BlackRock Global Allocation Fund (BlackRock Global Allocation Fund)" and "BlackRock Funds V", submitted their investment prospectuses to the US Securities and Exchange Commission ( 497 Prospectus) stated that some of its funds may participate in the trading of futures contracts based on Bitcoin.

In the past six months, the position of CME Bitcoin contracts has increased from 665 million US dollars to 2.555 billion US dollars, an increase of 284%. As the positions of CME Bitcoin contracts continue to rise, the influence of CME positions on the Bitcoin market is also expanding.

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Source: bybt

Funds Are Major Players in CME Bitcoin Futures

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According to the latest CFTC data, the current CME bitcoin futures contract positions are 52,860 bitcoins (10572 * 5), worth about 2.5 billion US dollars. According to bybt data, the position of CME Bitcoin futures contracts is the second largest in the world, second only to Binance's 55,700.

The CFTC divides users participating in CME Bitcoin futures contracts into two categories: "reported positions" and "non-reported positions". The latter are mainly small-scale investors who are considered unreportable by CFTC and have less influence on the market. The former is divided into "non-commercial positions" and "commercial positions".

Generally speaking, the main group of non-commercial positions is fund institutions, and the main group of commercial positions is hedging institutions, such as index funds for commodity investment. They are long in commodity investment, so they need to short in the futures market for hedging Save.

According to the latest CFTC data, funds (non-commercial positions) are the largest holders of CME Bitcoin futures, and 24 funds hold about 81.8% of CME Bitcoin short orders, worth about 2.03 billion US dollars. Among them, the top four traders hold 48.2% of CME bitcoin short orders. Even on a net basis, the top four traders hold a whopping 48% of short positions in CME Bitcoin. Currently, 48% of CME Bitcoin totals about $1.2 billion.image descriptionSource: CFTC

CME Bitcoin futures are having a bigger impact on the market

Previously, Rhythm BlockBeats had

"Why is the Grayscale GBTC premium only 2.77% left?" Are representative agencies bearish? "

According to the article, some institutions conduct GBTC positive premium arbitrage through CME.

Since GBTC currently has a negative premium and cannot be redeemed, it has less impact on the spot market.