Hedge Funds Bought Bitcoin Dip As It Touched $30,000: Report

Genesis Global Trading, New York-headquartered digital asset broker, sent out a note to its counterparties before bitcoin’s appreciation, saying macro funds began buying at the $35,000 level.

May 20, 2021 / 01:10 PM IST

Bitcoin | Representative image

The bitcoin crash reportedly gave way for increased institutional buying activity. The price of the largest cryptocurrency that touched $30,000 on May 19, picked pace touching $40,000, a 30 percent appreciation within hours.

Genesis Global Trading, New York-headquartered digital asset broker, sent out a note to its counterparties before bitcoin’s appreciation, saying that macro funds began buying at the $35,000 level, The Block reported.

The selling spree was triggered by forced liquidations on derivatives venues, which ultimately led to a price fall, the broker added.

The Block said several derivative traders positioned to heavily short gamma (sell to hedge) at a $40,000 price.

Moneycontrol could not independently verify the report.

“My money would be on Deribit short gamma guys forcing liquidations and making it even worse for themselves and dragging the whole market down,” Evgeny Gaevoy, CEO of market-making firm Wintermute, said in a message to the publication.

Deribit’s Luuk Strijers said the squeeze in the volume leading to liquidations wasn’t the cause but its consequence. “They would have been liquidated regardless.”