Short Sellers Jump on Crypto Stocks Despite Steep Cost of Wagers
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Short sellers have pounced on crypto-focused equities as the digital-assets space crumbles in the wake of FTX’s public implosion. They’re paying a steep price to place those wagers.
Crypto stocks are nearly three times more shorted than the average share, even as short sellers are paying almost eleven times as much in financing costs to bet against them, according to data compiled by Ihor Dusaniwsky and Matthew Unterman at S3 Partners.
Traders banking on losses in a handful of crypto stocks, including Block Inc., Coinbase Global Inc., MicroStrategy Inc. and five others, added $55 million worth of new shorts in the week through Friday, according to S3’s analysis. Block and Coinbase alone saw about $27 million of new short selling combined. Total crypto short interest for these eight stocks is more than $4.5 billion.
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