Hedge Funds Turn Net Long on CME Bitcoin Futures

The shift on CME suggests less interest in the basis trade and more confidence in Bitcoin’s upside. The futures basis has fallen to around 3%.

Key Takeaways

• Hedge funds on CME have flipped to a net long position in Bitcoin futures, a rare change in their positioning.
• The classic basis trade is losing appeal as the futures basis has dropped to around 3%.
• Bitcoin is trading above $65,000, after bottoming near $58,000 on 1 July.

Hedge funds trading Bitcoin futures on the Chicago Mercantile Exchange have moved to a net long position. That is an unusual shift and suggests institutional sentiment around Bitcoin is changing. According to CryptoQuant CEO Ki Young Ju, professional traders are now placing less emphasis on the classic basis trade and more on the possibility of additional price upside.

The Basis Trade Is Losing Appeal

For years, leveraged funds on CME were often net short Bitcoin futures. That setup fit the basis trade, where traders would buy spot Bitcoin or ETFs and sell futures at the same time to capture the spread between the two prices as the premium narrowed. In that kind of market-neutral strategy, the return comes from the spread compressing, not from Bitcoin moving higher.

That trade is looking less attractive now. The annualized three-month Bitcoin futures basis has dropped to about 3%, which is below the roughly 3.8% yield on U.S. two-year Treasury bonds. With less spread to capture, the incentive to keep the trade on is weaker, especially once financing, margin, and execution risks are factored in.

What This Shift Means

Ju described the move on CME as a rare break from years of structural short positioning. That matters for European crypto readers because CME futures are widely viewed as one of the clearest signals of how professional money is positioned in Bitcoin. A net long reading can point to growing confidence in further gains, although it is still only a derivatives signal and not a guarantee for the spot market.

Bitcoin is now trading above $65,000 (€56,400) after finding a bottom near $58,000 (€50,300) on 1 July. The move from structural shorts to a net long position lines up with the recovery the market has seen over the past few weeks. It also matches the broader price action in Bitcoin Holds $65,000 Despite CLARITY Act Delay, where the coin held around the same level despite political uncertainty in the U.S.