Crypto short trades looked set for a further hammering on Monday as most cryptocurrency-related stocks jumped in U.S. premarket trading.
Since November 6, short sellers of cryptocurrencies and stocks linked to blockchain have experienced significant losses as a result of bitcoin’s record-breaking rise and the expectation that U.S. President-elect Donald Trump would enact more benevolent regulations.
As the majority of equities linked to cryptocurrencies surged in U.S. premarket trading on Monday, it appeared that short positions in cryptocurrencies would take yet another beating. Following the spike in bitcoin prices, Coinbase was the last of them to rise by about sixteen percent.
According to data analytics firm Ortex, traders who placed bets against MicroStrategy, one of the largest corporate proponents of Bitcoin, lost over $1.2 billion between November 6 and November 8, and they have lost over $6 billion this year.
As of the closing on Nov. 8, the combined short-selling losses on blockchain-farm operator Bitfarms, cryptocurrency miners Riot Platforms and MARA Holdings, and cryptocurrency exchange operator Coinbase Global totaled approximately $1.2 billion.
The largest cryptocurrency in the world, Bitcoin BTC=, surged to a record high above $82,000 on Monday, an almost 19% increase since November 6, when Republican nominee Trump beat Vice President Kamala Harris to retake the president.
According to Susannah Streeter, head of money and markets at Hargreaves Lansdown, bitcoin speculators are placing bets on a more lenient regulatory environment and anticipate that the government will establish a reserve cryptocurrency fund, which would assist boost sustained demand.
Since November 6, investors who bet against iShares Bitcoin Trust exchange-traded funds—the largest ETF globally in terms of assets under management—have lost about $37 million.
Trump supported digital assets during his campaign, vowing to turn the US into the “crypto capital of the world” and amass a national bitcoin holding.