Shortsellers in crypto stocks are up about 126% this year – S3 Partners
Short sellers of crypto stocks have posted mark-to-market gains of about 126 percent this year, far outperforming those from other sectors, according to financial and analytics firm S3 Partners, amid risk-free sentiment in the broader stock market.
The downturn in the world’s largest cryptocurrency, bitcoin, which has fallen to $21,229 from its all-time high of $69,000 in November, and other key players such as cryptocurrency exchange operator Coinbase Global have paved the way for what has been termed the “crypto- winter”.
Short sellers, betting on a stock decline, have an average short stake of $3 billion in the sector, according to S3.
In comparison, short sellers’ profits in software and services, as well as media and entertainment, were about 50 percent so far and 46 percent in 2022.
Shares in Coinbase and software developer Microstrategy Inc are down 78.6% and 69% so far this year. Short-term interest as a percentage of the company’s float was 15 percent for Coinbase and 27.5 percent for Microstrategy, according to S3.
“Shorting crypto stocks can remain a profitable trade,” said Ihor Dusaniwsky and Matthew Unterman of S3 Partners. “Shortsellers should not be blamed for short-term downward price movements, but they can be an active participant in future rallies.”
According to S3 Partners, there has been $71 million in new short selling in crypto stocks so far this month.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)
