Hedge funds are betting big against Bitcoin in the futures markets, possibly looking to profit from elevated funding rates, as the most valuable cryptocurrency continues to trade sideways.<\/p>\n
Funds have built up record short positions in Bitcoin futures, according to data<\/a> shared by zerohedge. As each CME Bitcoin futures contract represents 5 BTC, these institutions are reportedly short more than 80,000 BTC, notionally worth $5.4 billion at today\u2019s prices.<\/p>\n One possible explanation for the extreme positioning is basis trades, which look to profit from the difference between spot and futures prices. By buying spot Bitcoin and opening an equal-sized short futures position, traders can capture the differential when prices converge upon expiry. June futures are currently trading at a 3% premium.<\/p>\n <\/p>\n <\/a><\/p>\n Elevated perpetual funding rates sweeten the deal as traders get paid to hold their short positions \u2014 a source of yield being leveraged by Ethena\u2019s<\/a> controversial new \u2018synthetic dollar.\u2019<\/p>\n Crypto markets have recovered some of the week\u2019s losses, with Bitcoin rallying 3% in the past 24 hours to trade around $68,000. Ether is up 1% at $3,375.<\/p>\n Among the top 100 digital assets by market capitalization, Ethereum Layer 2 network Mantle and veteran DeFi lender MakerDAO are today\u2019s best performers, notching up gains of 12% and 7%, respectively. MKR is trading above $4,000 for the first time since May 2021, boosting its valuation to nearly $4 billion.<\/p>\n <\/p>\n <\/a><\/p>\n Cross-chain interoperability protocol Wormhole\u2019s W token, which launched yesterday<\/a>, is down 23% today, likely due to selling pressure from airdrop recipients.<\/p>\n <\/p>\n![\"Bitcoin](\"https:\/\/thedefiant.io\/_next\/image?url=https%3A%2F%2Fcdn.sanity.io%2Fimages%2F6oftkxoa%2Fproduction%2Fed4e6e55093bb6fad9eed8fc9b9245314c170c83-641x376.jpg&w=828&q=100\")
Markets Bounce Back<\/h2>\n
![\"MKR](\"https:\/\/thedefiant.io\/_next\/image?url=https%3A%2F%2Fcdn.sanity.io%2Fimages%2F6oftkxoa%2Fproduction%2F6476368f7ba7f35439b7e4afe1382195522764d8-825x453.jpg&w=828&q=100\")