Net short interest in Bitcoin futures among leveraged funds has reached an all-time high, Bloomberg reported, but that doesn’t mean hedge funds are broadly bearish. It’s more likely due to the growing popularity of market-neutral strategies. Strategies known as basis trading, which seek to profit from differences between the spot and futures markets, are likely the main reason for the short interest in nearly 18,000 CME Bitcoins. Basis trading has become more popular in the cryptocurrency space since the launch of spot Bitcoin exchange-traded funds (ETFs) in January, which allow traders to buy ETFs and sell futures representing Bitcoin at a higher price, profiting from the price difference. These ETFs make this trade more accessible because the pairs can be traded through regulated brokers, simplifying the initiation of what is known in crypto markets as a cash-and-carry strategy. The rise in short interest in futures coincides with a rebound in demand for spot Bitcoin ETFs, which now collectively hold more than $61 billion in assets. However, while basis trading is currently a popular strategy, it should not be mistaken as the primary driver of inflows into ETFs.