Short sellers of cryptocurrencies and blockchain-related stocks have suffered huge losses since November 6, after Bitcoin rose to record levels, amid optimism that US President-elect Donald Trump will implement a more favorable regulatory framework.
Cryptocurrency shorts looked poised for a further hit on Monday as most cryptocurrency-related stocks jumped in pre-market trading in the US. Among them, Coinbase shares recently rose nearly 16%, tracking the rise in Bitcoin prices.
Traders who bet against MicroStrategy, one of Bitcoin’s biggest corporate backers, lost more than $1.2 billion between Nov. 6 and 8, according to data analysis firm Ortex, and are down more than $6 billion so far this year.
Get breaking national news
For news affecting Canada and around the world, sign up to get breaking news alerts delivered to you right as they happen.
Combined short selling losses on cryptocurrency exchange operator Coinbase Global, cryptocurrency miners Riot Platforms and MARA Holdings, and blockchain farm operator Bitfarms were about $1.2 billion, as of the Nov. 8 close.
Bitcoin (BTC), the world’s largest cryptocurrency, rose to a record high above $82,000 on Monday, a nearly 19% jump since November 6, when Republican candidate Trump regained the presidency after defeating Vice President Kamala Harris.
“Bitcoin speculators are betting on a looser regulatory environment and expect the authorities to build a reserve fund for cryptocurrencies, which will help drive continued demand,” said Susanna Streeter, head of money and markets at Hargreaves Lansdowne.
Investors betting on the iShares Bitcoin Trust ETF, the world’s largest ETF by assets under management, have lost nearly $37 million since November 6.
Trump embraced digital assets during his campaign, promising to amass a national stock of bitcoin and make the United States the “cryptocurrency capital of the planet.”
—(Reporting by Shashwat Chauhan in Bengaluru – Prepared by Mohammed for the Arabic Bulletin) Editing by Pooja Desai
