Wall Street giants increase bets against Ethereum; Understand
-
- Bets against Ethereum soar.
- Hedge funds increase positions.
- Ethereum price down.
In a surprising development in the cryptocurrency world, major Wall Street hedge funds have dramatically stepped up their bets against the Ethereum , the second largest cryptocurrency by market value. This movement, which has reached historic levels, raises a series of questions about the future of Ethereum and what may be behind this bold decision by institutional investors.
According to recent data from cryptocurrency analytics platform Kobeissi Letter, short positions in Ethereum held by these hedge funds have seen a staggering 40% increase in just one week, and a 500% jump since November 2024. This escalation in bets against Ethereum is unprecedented in the history of the cryptocurrency market, which has led many analysts and investors to wonder what these big players in the financial market might know that the rest of the market doesn’t.
“What’s going on with Ethereum? Ethereum short positioning is now +40% in ONE WEEK and +500% since November 2024. Never in history have Wall Street hedge funds been this short on Ethereum, and it’s not even close. What do hedge funds know is coming?” wrote .
The analysis highlighted a discrepancy between ETH’s price action and the extreme positioning of hedge funds. “We saw the effects of this extreme positioning on February 2nd. Ethereum fell -37% in 60 hours as trade war headlines emerged. It almost felt like the flash crash seen in stocks in 2010, but without the headlines. Over $1 trillion worth of crypto was wiped out in HOURS.”

This massive sell-off comes at a time when Ethereum has shown resilience in other areas. Despite the increase in short positions, Ethereum has attracted a steady stream of investment, with significant capital inflows in December 2024. Additionally, Ethereum trading volume has seen notable spikes, especially on dates like Inauguration Day in the United States and around high market volatility events.
“Interestingly, even as short exposure increases in December 2024, Ethereum inflows have been HIGH. In just 3 weeks, ETH has seen +$2B of new funds with a record weekly inflow of +$854M. However, hedge funds are betting on ETH to rally and limit breakouts.”
However, Ethereum’s price hasn’t matched this optimism on other metrics. The cryptocurrency is still down about 45% from its all-time high, reached in November 2021. This discrepancy between hedge fund positioning and Ethereum’s price action raises concerns about the sustainability of the cryptocurrency’s rally and whether it could be facing bigger challenges on the horizon.
One of the biggest unknowns is what’s driving these hedge funds to bet so heavily against Ethereum. Some analysts suggest they may be anticipating a broader market correction or a tighter regulatory crackdown on cryptocurrencies. Others point to growing competition from other blockchain platforms and uncertainty surrounding the Ethereum 2.0 upgrade as possible factors.
At the time of publication, the price of Ethereum was quoted at US$2.644,67, down 0.3% in the last 24 hours.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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