DeFiance Capital founder: Crypto hedge funds have at least $5 billion in liquid capital to deploy into the market, which may have driven the recent surge

2023-10-20 18:52:01

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ChainCatcher news, DeFiance Capital founder and CEO Arthur Cheong stated on his social platform that many people are surprised by the strength of this rebound, but in such a low liquidity environment, most movements are primarily position-driven.

According to the latest VisionTrack Galaxy institutional cryptocurrency hedge fund and risk report, the total AUM of cryptocurrency hedge funds is $10 billion. From conversations with many peers, it appears that most funds have long positions of about 50% or less, which means that at least $5 billion in liquidity can be deployed into the cryptocurrency space in a short time, potentially explaining the recent rise.

In the medium term, it remains to be seen how the market will absorb over $5 billion in structural sell-off flow from FTX, Celsius bankruptcy assets, Bitcoin miners, U.S. government sell-offs, and potential Mt. Gox distributions.

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