Hedge Funds Bet Against Bitcoin—Can Strategy Still Supercharge Its Rally?

Bitcoin's bull run faces an unlikely foe: hedge funds stacking short positions. Are they misreading the market—or seeing something retail isn't?

The contrarian playbook

Institutional bears are doubling down on crypto's volatility, betting that leveraged longs will get squeezed. But with ETF inflows hitting record highs last quarter, their timing might be comically off—like shorting Tesla in 2019.

Liquidity vs. leverage

Market makers whisper about gamma traps brewing. If BTC punches through $90k again, these hedgies could fuel the very rally they're trying to short. Classic Wall Street—bringing a spreadsheet to a codefight.

The last laugh? Probably whoever hodls through the fireworks.

Bitcoin treasuries lose their edge

10x Research compared Strategy’s performance to that of other Bitcoin treasuries and found that companies holding Bitcoin are losing their market appeal. Strategy’s shares are down 13% since mid-July, while Tokyo-listed Metaplanet has dropped 37% over the same period.

The analysis linked these declines to a collapse in volatility across both Bitcoin and Strategy, reducing the premium investors once paid for exposure. With less convexity in play, the ability of such companies to amplify Bitcoin’s upside has eroded, limiting their capital-raising power.

Meanwhile, new investment flows are being pulled toward ethereum (ETH) treasuries and crypto initial public offerings, which are seen as offering fresher opportunities. According to 10x Research, this shift validates their July 19 call that Bitcoin treasuries would lose their edge as volatility compressed through the summer.

The report leaves investors with a key question: should re-entry depend on a specific price level such as $360, or on broader market conditions that could revive demand for treasury-style exposure?