Markets

Who’s buying and selling bitcoin futures? An analysis of the CFTC COT report

Quick Take

  • The total number of unique bitcoin futures traders has come back down to around 40 accounts since CBOE halted its product
  • There currently isn’t any sell-side/bank representation in making markets for bitcoin futures, and only four asset managers/institutional investors have ever registered as a reportable trader in the report.
  • Of the outstanding contracts that are long, hedge funds currently have by far the greatest outstanding notional value, now north of $100 million
  • However, as of this past week, hedge funds have now flipped to a more neutral net positioning, while Other traders are significantly net short (80/20)
  • Given the low number of unique traders within this market, the concentration of net exposure within the 4 largest traders is quite high. Currently the top 4 long traders make up 40% of net long exposure and the top 4 largest short traders make up close to 60% of net short exposure                                                                                                                                                                                          

Fresh off CME Group’s announcement last week that its bitcoin futures product in May had its best month since the product first launched in late 2017 (record levels in both open interest and volume), we decided to analyze the CFTC’s Commitment of Traders (COT) report to unpack who is driving the growth in open interest, and compare how traders are currently positioning themselves (long/short) relative to historical net exposure.