Omicron Risk Unlocks Profit For Retail Traders Shorting Bitcoin

Omicron Risk Unlocks Profit For Retail Traders Shorting Bitcoin

Bitcoin Price, Omicron

12/3/2021 12:36:00 AM

Omicron Risk Unlocks Profit For Retail Traders Shorting Bitcoin

The latest Commitments of Traders report shows that wealthy retail traders used CME futures to short bitcoin to the tune of $0.5 billion at the start of the latest Omicron -led pullback, and are reaping a handsome reward.

... [+]Futures Trading Commission (CFTC) Commitments of Traders (COT) reportForbesCommercial traders, which are firms and/or professionals with deep industry and market knowledge generally hired to mitigate business risk through use of futures contracts, cut back sharply their long bitcoin futures holdings to pre-BITO levels but boosted sharply their ‘spread’ contracts – which is the practice of holding long and short positions in the same contract to provide liquidity to those who need it. Separately and over recent weeks, this group of traders has built a large short position equivalent to $113 million worth of MBT futures contracts which makes them the largest short liquidity providers. Said differently, this group of traders went from facilitating liquidity for the large surge from bitcoin ETF in October to now getting back to a smaller exposure and selectively providing liquidity in new areas like MBTs.

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Meanwhile retail traders shrewdly adopted the previously discussed short bitcoin futures position, betting on the price of bitcoin possibly falling below the $57,600 level bitcoin seen last week – bitcoin did fall to a low of 53,200 on Nov 28 and that could have provided some of these retail traders a profitable exit of their short trades – which become profitable as the price of an asset decreases in value.   

Long (buy) and short (sell) bitcoin futures held by trader group, according to the Commodity Futures... [+]Trading Commission (CFTC) Commitments of Traders (COT) reportForbesThe big picture remains bright for bitcoin and cryptocurrencies at large as institutional demand continues to grow, with large asset managers like Vanguard and BlackRock allowing funds they manage to pour approximately $3 billion each into crypto stocks as of Nov 2021 and rival Fidelity nearly doubling to 200 their institutional clients – hedge funds, family offices, registered investment advisors, pensions and corporate treasuries – that use the firm’s bitcoin execution and custody services. headtopics.com

While bitcoin price has dropped 18% below its $69,000 Nov 10 high, this has been due to robust macro headwinds like rising inflation and the Omicron variant impact on the global economy, and not due to weak bitcoin demand. In fact, the sharp drop in crude oil prices - Brent crude oil price down 20%+ since Nov 10 – shows that Omicron uncertainty is providing an organic break to inflationary forces. It will be weeks if not months until the world regains confidence that it can defeat the Omicron variant, and in the meanwhile it’s sensible to expect lower expectations for global economic growth, lower inflation, and a modest appreciation of risky assets like cryptocurrencies. For these reasons, shrewd investors will continue to look to crude oil price action as a proxy for the expected energy demand globally but also as a guide for bitcoin appreciation potential over the short term.

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Why scientists — and much of the world — reacted so quickly to the omicron variantThese early signs made omicron different from previous Covid variants, experts say. Get vaccinated, wear a mask, social distance and go about your business safely. Why? B/c THERE'S just NO GETTING AROUND IT. It's up to all of us to choose to come together to stop the spread to end the pandemic. Sometimes you just gotta do what you gotta do. Just do right. Shut up already it's being overblown. What a shame the US has abundant vaccine but stupid people would rather take horse dewormer. Send the vaccine to the countries that have low vaccination rates so we can get out of this.

First confirmed US case of Omicron coronavirus variant detected in CaliforniaThe US' first confirmed case of the Omicron coronavirus variant has been identified in California. Dr. Anthony Fauci, the nation's top infectious disease expert, said the case was an individual who traveled from South Africa. “The person was fully vaccinated and is experiencing 'mild symptoms, which are improving at this point,' Fauci said.”

5 New Things Experts Just Discovered About COVIDHere's what's new, from the omicron variant to updated booster guidance.

Face masks reintroduced in Guernsey over new variantFace coverings are mandatory in some public areas in Guernsey in response to the Omicron variant.

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