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Key Takeaways
- Abraxas, Fasanara and Wintermute hold large Bitcoin and Ether shorts that hedge, not oppose, the current rally.
- The positions form the short leg of cash-and-carry trades that collect funding as rates turn positive again.
- Institutional activity is also rising on CME, where Bitcoin futures open interest has climbed sharply.
Trading firms Abraxas Capital, Fasanara Capital and Wintermute have built large short positions in Bitcoin and Ether perpetual futures on the Hyperliquid exchange even as Bitcoin’s price climbs.
On-chain tracking firm Lookonchain attributes combined short positions of 138,569 ETH, worth roughly $338 million, and 3,425 BTC, worth roughly $265 million, to the three firms. The positions are not directional bets against the rally. They are the short leg of a cash-and-carry trade designed to collect funding payments while price risk is hedged out.
Wallets Linked to Trading Firms Show Large Positions and Withdrawals
Bitcoin climbed from around $62,000 to above $80,000 within days last week, a move that Lookonchain data shows wiped out $3 billion in leveraged short positions built during the prior price decline.
The on-chain positions attributed to Abraxas Capital, Fasanara Capital and Wintermute were tracked separately from that liquidation event and reflect wallets that Lookonchain has linked to the three firms, rather than positions confirmed directly by the firms themselves.
Arkham Intelligence data shows a wallet linked to Abraxas Capital withdrew 73,872 ETH, worth approximately $173 million, from Binance over four days. Moving spot Ether off an exchange and into cold storage is consistent with holding the long side of a hedged position rather than preparing to sell.
The Cash-and-Carry Trade Explained
The strategy is known as a cash-and-carry, or basis, trade. A trader holds a spot position in a cryptocurrency while shorting an equivalent amount of the same asset through perpetual futures. Because the two positions offset each other, the combined exposure to price swings is minimal.
The trader instead collects the funding rate, a periodic payment that traders holding long futures positions pay to those holding short positions when a market is bullish.
According to Coinglass data, Bitcoin funding rates across major exchanges currently sit around 0.01% per eight hours. Coinalyze data puts aggregated perpetual funding at approximately 0.0109% per hour for Bitcoin and 0.0087% for Ether.
Crypto protocol Aegis reported that the 30-day average annualized Bitcoin perpetual funding rate reached 6.7% on August 24, while the seven-day average reached 8.7%.
Funding Recovers After a Months-Long Drought
Glassnode data shows Bitcoin’s annualized perpetual funding rate stayed compressed or negative for much of February through July, as the market declined from all-time highs above $120,000 and leveraged long positions were unwound. Negative funding means the basis trade generates no income and can cost money to run.
This month’s rally reversed that pattern. As leveraged short sellers were squeezed out by rising prices, funding turned positive again, reopening the trade for firms with the balance sheet to run it.
21Shares Capital Markets said this week that while the Bitcoin basis remains rich, funding levels themselves are standard rather than overheated, and added that the trade has spread beyond Bitcoin and Ether, with Solana among the assets showing elevated carry.
Institutional Positioning Extends to CME Futures
The trade is not confined to on-chain exchanges. Glassnode data shows open interest in CME Bitcoin futures rose from around 87,000 BTC to 122,000 BTC in recent weeks. CME is the regulated futures venue most widely used by institutional investors.
CryptoQuant data shows hedge funds trading CME Bitcoin futures have recently flipped net long, a shift the firm characterized as unusual because this cohort typically runs short as the other side of the basis trade.
The change suggests some institutional players are now making a directional bet on further gains rather than only running a market-neutral carry position. Coinalyze data shows aggregated Ether perpetual open interest has climbed to $14 billion, a level not reached in several months.
Traders Flag Fragility Beneath the Rally
Not every market participant reads the positioning as low-risk. Crypto trader @LLuciano_BTC said in an X post this month that funding has turned positive while Bitcoin has struggled to extend its gains meaningfully, calling the dynamic fragile.
Trader @misterrcrypto raised a related concern in a separate post, saying that crowded leveraged long positions increase the odds of a sharp pullback if the rally’s momentum stalls, which could disrupt basis positions on both sides of the trade.
For firms able to run the strategy at scale, the current funding environment still stands out after months in which the trade offered little income. Whether that positioning holds up depends on how the rally’s underlying momentum develops in the coming weeks.
