Short sellers in the cryptocurrency and blockchain sectors have faced significant losses since November 6, following a surge in Bitcoin prices to new record highs. The rally was fueled by optimism that U.S. President-elect Donald Trump would usher in a more favorable regulatory environment for digital assets.
The impact on short sellers became even more pronounced on Monday, as many cryptocurrency-related stocks, including Coinbase, surged in premarket trading, tracking Bitcoin’s price jump. Coinbase saw a nearly 16% increase, mirroring the cryptocurrency’s rise.
Traders who had bet against MicroStrategy, a major corporate supporter of Bitcoin, suffered losses exceeding $1.2 billion between November 6 and 8, according to data from Ortex. For the year, these traders have lost more than $6 billion. Similarly, short-selling losses on other crypto-related stocks like Coinbase, Riot Platforms, Marathon Digital Holdings (MARA), and Bitfarms amounted to about $1.2 billion as of November 8.
Bitcoin, the largest cryptocurrency by market value, surged to a record high above $82,000 on Monday, representing a nearly 19% increase since November 6 when Trump won the U.S. presidential election. Market observers suggest that Bitcoin investors are betting on a friendlier regulatory environment under Trump’s administration, with expectations that the U.S. government might establish a reserve crypto fund, driving continued demand for digital currencies.
According to Susannah Streeter, head of money and markets at Hargreaves Lansdown, “Bitcoin speculators are betting on a more clement regulatory environment and have expectations that the authorities may build up a reserve crypto fund, helping lift ongoing demand.
Leave feedback about this