Our bullish Bitcoin view appears to be paying off, though the rally is unfolding gradually, largely because it's being driven primarily by the unwinding of short positions rather than purely fresh buying. Still, new inflows are starting to add to the upside pressure.
That said, there are important insights emerging from the Bitcoin options market, where pricing by sophisticated traders has proven particularly instructive. Meanwhile, hedge funds are sitting on record short positions against Coinbase and Circle, making it critical to monitor the levels at which those shorts move underwater.
The key question, then, is whether Coinbase and Circle now offer an opportunity, and whether Bitcoin's rally will be powerful enough to force the hand of hedge funds that have bet billions against Coinbase and other crypto companies.
Bitcoin (LHS) vs. Coinbase (RHS) - which one to buy?
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