Bitcoin ETF

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Short sellers in the cryptocurrency industry have faced losses exceeding $6 billion this year, primarily due to Bitcoin’s (<a href="https://crypto.news/price/bitcoin/" data-type="link" data-id="https://crypto.news/price/bitcoin/">BTC</a>) remarkable rally since the start of January. 
A Dec. 5 <a href="https://www.s3partners.com/articles/crypto-stock-short-recap" target="_blank" rel="noopener">report</a> by S3 Partners reveals that traders who took short positions against publicly listed cryptocurrency companies like <a href="https://crypto.news/?s=coinbase">Coinbase</a>, <a href="https://crypto.news/microstrategy-apes-593m-into-bitcoin/">MicroStrategy</a>, and <a href="https://crypto.news/?s=marathon+digital">Marathon Digital</a> are currently facing on-paper losses amounting to $6.05 billion. 
Most of these losses have occurred in the past three months during a period marked by a dramatic turnaround in Bitcoin’s value, the report goes on to state. 
After Bitcoin dropped to a quarterly low of $25,133 in September 2023, short sellers increased their positions, anticipating a downturn in what they perceived as an overbought sector. 
However, contrary to their expectations, Bitcoin experienced a significant surge, recording a 76% increase and reaching a new yearly high of $44,345 on Dec. 5, <a href="https://coinmarketcap.com/currencies/bitcoin/" target="_blank" rel="noopener">according</a> to CoinMarketCap. This unexpected rally resulted in approximately $2.65 billion in losses for short sellers. 
<figure class="wp-block-image size-full is-resized">
 <img loading="lazy" decoding="async" width="778" height="619" src="https://crypto.news/app/uploads/2023/12/a05a9f06-1789-4d95-8d0d-80f91a5e0833.webp" alt="Bitcoin's massive rally wiped out $6b in short positions in 2023 - 21" class="wp-image-14224554" style="width: 100%;height:auto">
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 Total year-to-date losses for short sellers in crypto-related stocks | Source: S3 Partners
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 You might also like: <a href="https://crypto.news/bitcoin-is-up-by-80-since-jim-cramer-advised-viewers-to-sell/"> Bitcoin is up by 80% since Jim Cramer advised viewers to sell </a> 
Ihor Dusaniwsky, S3’s managing director of predictive analytics, noted that the buying-to-cover in heavily shorted crypto stocks coupled with long buying has been pushing stock prices upwards since late October. 
The year-to-date rally of Bitcoin stands at 161%, which analysts believe has been a key factor driving up the share prices of crypto firms. Coinbase and MicroStrategy, for instance, have seen their values increase by 312% and 285%, respectively, within this time frame. 
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 <img loading="lazy" decoding="async" width="898" height="495" src="https://crypto.news/app/uploads/2023/12/BTC_1D_graph_coinmarketcap-7.png" alt="Bitcoin's massive rally wiped out $6b in short positions in 2023 - 22" class="wp-image-14224553">
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 BTC 24-hour price chart | Sorce: CoinMarketCap
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At the time of writing Bitcoin is trading at $43,935, with its recent surge partly attributed to the growing <a href="https://crypto.news/k33-research-bitcoins-return-to-ath-will-be-soon-thanks-to-bitcoin-etf/">anticipation of a potential spot Bitcoin ETF approval</a> in January. 
Coinbase has been particularly impactful in the losses incurred by short sellers, with its 290% rally this year contributing to about $3.5 billion of the total losses. MicroStrategy’s more than 300% increase in stock value has added a further $1.4 billion to the losses. 
Despite these setbacks, some short sellers continue to invest in these contrarian trades, hoping that the rally will lose momentum. Since mid-September, there has been nearly $700 million in new short selling. 
However, if Bitcoin maintains its upward trajectory, this trend might reverse, adding to the approximately $2.2 billion of short covering observed in the sector this year. 
<blockquote class="wp-block-quote"> 
 “Investors looking for crypto exposure can now pick between the actual crypto-currencies or crypto stocks – if the recent momentum continues, both look to outperform the market.” <cite>Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners</cite>
</blockquote> 
 Read more: <a href="https://crypto.news/cathie-wood-spot-bitcoin-etf-seen-as-ultimate-endorsement-for-institutional-investors/"> Cathie Wood: spot Bitcoin ETF seen as ultimate endorsement for institutional investors </a>

Bitcoin’s massive rally wiped out $6b in short positions in 2023

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