Massive Ethereum Shorts Are a Feature, Not a Flaw: Here’s the Real Reason
The post Massive Ethereum Shorts Are a Feature, Not a Flaw: Here’s the Real Reason appeared on BitcoinEthereumNews.com.
TLDR: Ethereum futures net shorts hit a record -13,291 contracts on CME in early July 2025. Funds earn 13% annually by shorting futures and staking ETH in delta-neutral trades. Ethereum open interest jumped $15.9B from $2.2K to $3K, signaling peak leverage. A sharp ETH move could trigger short squeeze or rapid deleveraging across markets. Leveraged traders are stacking short positions on Ethereum (ETH) at a record pace, signaling a bold market strategy rather than simple bearish sentiment. Recent data from the Commodity Futures Trading Commission (CFTC) shows that institutional traders are holding their largest net short position ever in ETH futures. The move, however, appears more calculated than reactive, tied closely to a delta-neutral basis trade that blends futures, spot holdings, and staking rewards. This trend has caught market watchers’ attention as Ethereum’s price climbs while leveraged shorts pile up. The setup could either trigger sharp downside volatility or force an aggressive short squeeze if spot prices rally. Record Short Positions Unfold on CME Futures According to a chart shared by Zerohedge, leveraged short positions in ETH futures have reached -13,291 contracts as of early July 2025. This marks the most extreme net short ever recorded on the CME for Ethereum. The red bars, representing net short totals, have deepened steadily since April, with a vertical spike downwards from mid-2025. Historical data shows that short positioning remained fairly balanced until late 2023, before tipping heavily bearish through 2024 and into 2025. Ether leveraged shorts going all-in: biggest short on record pic.twitter.com/PYuDvJdMhW — zerohedge (@zerohedge) July 13, 2025 These positions reflect institutional behavior in cash-settled futures, which are often used by hedge funds and proprietary trading firms. While the surface shows heavy shorting, the intent is more complex, involving arbitrage between derivatives and spot holdings. Basis Trade Drives Ethereum Short Build-Up…
