Leveraged funds abandon basis trades as futures yields fall below Treasuries, signaling a shift to bullish bitcoin positioning.
Hedge funds have turned net long on CME bitcoin futures for the first time in years, reversing a structural short bias. The shift follows a decline in futures yields below U.S. Treasury returns, undermining the basis trade strategy that historically kept funds net short.
Traditionally, leveraged funds profited from the basis trade by buying spot bitcoin or ETFs while selling futures, capturing the premium as prices converged. This strategy maintained a net short position in futures markets, but weak yields have prompted an unwind as bitcoin rebounds from $58,000 to $65,000.
The move suggests professional traders are now betting on further price appreciation, abandoning market-neutral strategies in favor of outright long exposure.