126% return for short sellers in the stock market who found blood odor in cryptic water

126% return for short sellers in the stock market who found blood odor in cryptic water – Mail Bonus

Short sellers have been killed in various sectors of the US stock market this year, but no other sector “holds a candle” for the blockchain industry, as the profits of short-selling cryptocurrencies increased by 126% in 2022, according to new data.

On Thursday, technology and data analytics firm S3 Partners released a video that recently summarized its report, which showed that overall, US stock sellers rose on average more than 30% over the year.

Some of this profit was due to short selling of cars and components (increased by 54%), software and service stocks (increased by 50%), media and entertainment stocks (increased by 46%) and retail inventory (increased by 46%). ) during the year, although this has all faded compared to cryptocurrencies, which increased short selling gains by 126% in 2022.

“But none of these industries hold candles to short sellers in the cryptocurrency industry, up 126% among short-term interest rates of $ 3 billion.”

Crypto stocks with the highest short interest rates include exchanges of Coinbase Global (COIN), Bitcoin Miner Marathon Digital Holdings (MARA) and MicroStrategy (MSTR), a software company also known for being the largest holder of Bitcoin.

Short selling occurs when an investor borrows a security and sells it on the open market with the hope of buying it back in the future for less, which makes the difference in his own pocket. This is economical when prices fall.

Short-term interest rates are the total number of shares in a particular stock that have been shorted by investors but have not yet been hedged or closed. High or growing short-term interest may indicate that investors are pessimistic about a particular stock.

At the time of writing, Coinbase shares have fallen 79.67% so far this year (YTD), Marathon Digital has fallen 80.22% YTD and MicroStrategy has fallen 71.10% YTD, according to Google Finance.

However, S3 Partners says that while the rate of cryptocurrency short selling has remained high, with $ 71 million new short sales during the period, the mutual fund that can be lent is drying up – meaning “potential short sellers could be late for the party.”

“As the share utilization is 91%, it can be difficult to make short selling in size and loan interest rates can make it expensive for new and existing short selling.

Utilization is measured by the number of equity loans divided by available shares in the securities lending market, as a high utilization rate indicates that demand for shares from short sellers is increasing.

On Tuesday, Ihor Dusaniwsky, chief analyst at S3 Partners, told 82,000 Twitter followers that Coinbase’s short-term interest rate reached $ 1.52 billion on June 14, while MicroStrategy’s short-term interest rate reached $ 689 million. Marathon Digital Holdings’ short-term interest rate was $ 181 million.

Connected: Further disadvantages are expected, but many data points suggest that Bitcoin is undervalued

Falling cryptocurrency prices are accompanied by a collapse in cryptocurrency prices and a downturn in traditional markets amid sharp interest rate hikes and high inflation.

On Thursday, the price of Bitcoin fell to $ 20,205 as rumors spread about the possible collapse of the cryptocurrency fund Three Arrows Capital (3AC).

Recent price changes have led some analysts to believe that a very long period of compression and accumulation for the cryptocurrency market is coming.