It has been a volatile few months for bitcoin.
The battle of hedge-fund short sellers versus retail traders who are coordinating on social media to drive the price higher could be a sign of what’s to come for the world’s biggest cryptocurrency.
Data from crypto news and analysis company The Block shows that hedge funds are short bitcoin by more than $1 billion.
That term “shorting” means that traders and hedge funds are betting that the price of bitcoin will go down. Those short positions ramped up starting in October 2020, just as bitcoin’s latest rally began to take hold.
Meanwhile, individual investors are still buying into bitcoin, among other cryptocurrencies, as they bet that the price will go up.
Retail brokerages including Robinhood have extended trading restrictions on stocks such as GameStop, and as of Friday, the trading app is also limiting trading in cryptocurrencies.