Interest in bets against bitcoin, the flagship cryptocurrency, has nearly doubled since the beginning of this month, according to data from a leading cryptocurrency exchange, Bitfinex.

The trend, first spotted by MarketWatch, shows that on August 1, the outstanding short interest on the exchange was of little over 17,000 BTC, and surged to about 30,300 BTC at press time, after falling from over 36,000 BTC.




The decline in bitcoin shorts likely came from the crypto’s recent price rise. The flagship cryptocurrency is currently trading at about $6,460 after recovering from a decline that saw it reach the $6,200 mark, according to CryptoCompare data.

Short sales can be seen as bets against the cryptocurrency. Citing Kasper Rasmussen, head of marketing at Bitfinex, MarketWatch noted that on the exchange these are placed through borrowed funds from its peer-to-peer funding market. Further, the news outlet cited Bitfinex’s explanation, which reads:

In a ‘short sale’ of bitcoin, the seller also enters into a regular spot sale of bitcoin except that the transaction is settled by delivering bitcoin that she has borrowed.


Entering short positions can be risky. As covered, last month bitcoin surged over $600 in about 20 minutes after short sellers lost $180 million on crypto derivatives exchange BitMEX in a large short squeeze. Recently, bitcoin has been attracting bearish calls after slipping below its 50-day moving average. In mid-July, the cryptocurrency fell below its 200-day moving average, which also helped spark an increase in short sells.

These bearish calls include that of CNBC’s Jim Cramer, who revealed he believes the cryptocurrency could go as low as $800, as according to him “this thing has really become like an outlaw currency.”

Other than technical indicators, a recent rejection by the US Securities and Exchange Commission (SEC) of the Winklevoss twins’ bitcoin ETF application saw the cryptocurrency drop 3.5%.

Although the market has been paying close attention to the VanEck-SolidX bitcoin ETF application, whose decision is set to come until the September 30 deadline,  the CEO of cryptocurrency-focused firm Pantera Capital, Dan Morehead, has argued investors shouldn’t focus on it, but on the Intercontinental Exchange’s venture with Microsoft and Starbucks, Bakkt.

Bitcoin activist Andreas Antonopoulos seemingly agrees, as he recently revealed h believes bitcoin ETFs are a “terrible idea” because of the potential control institutional players could have over BTC. Despite the bearish trend Chris Yoo, portfolio manager a Black Square Capital, told MarketWatch the selloff may be close to an end. He was quoted as saying:

The crypto market appears to be in its final stretch of its bearish state. Most importantly, the ecosystem will continue to develop and grow from the increase in talent and public awareness, leading to the recovery of the market in the near future.

Chris Yoo

Recently Rivemont Investments, which manages the Rivemont Crypto Fund, has recently sent a note to its clients revealing that as long as BTC’s price stays above the $6,000 support level, the cryptocurrency’s future outlook is still positive.