Bitcoin Surge Causes Losses for Short Sellers

Short sellers in the cryptocurrency and blockchain sectors have experienced significant losses since November 6, coinciding with a sharp increase in Bitcoin's value. This rise in the cryptocurrency's price follows market optimism that elected U.S. President Donald Trump will bring a more favorable regulatory environment for digital currencies.

Today, cryptocurrency-related stocks saw significant gains in pre-market trading in the U.S. For example, Coinbase (NASDAQ:COIN) Global recorded an approximate 16% increase, mirroring Bitcoin's price movements.

According to a report from data analytics firm Ortex, investors who shorted MicroStrategy, one of Bitcoin's major institutional supporters, faced losses exceeding $1.2 billion between November 6 and November 8. Cumulative losses for the year have surpassed $6 billion.

As of the market close on November 8, notable additional losses for short sellers included approximately $1.2 billion in various crypto-related companies, such as Coinbase Global, cryptocurrency mining firms Riot Platforms and MARA Holdings, and blockchain farm operator Bitfarms.

Bitcoin itself reached a new record level above $82,000 on Monday, marking an increase of around 19% since November 6, when Donald Trump won the presidential race against Vice President Kamala Harris.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, stated, "Bitcoin speculators are betting on a more favorable regulatory environment and have expectations that authorities may establish a reserve crypto fund to help continuously boost demand."

Investors betting against the iShares Bitcoin Trust, the ETF with the largest managed assets, have seen losses nearing $37 million since November 6.

Throughout his campaign, Trump expressed support for digital assets, promised to stockpile a national Bitcoin reserve, and aimed to position the U.S. as "the crypto capital of the planet."