Cryptocurrency analyst James Van Straten shared that he met with three separate hedge fund managers in the last week and how the hedge funds positioned themselves after the sharp decline in Bitcoin.
According to the analyst, funds that made significant gains during the decline have now completely reversed their game.
Van Straten said that all the hedge funds he spoke with made significant profits from short positions they opened in Bitcoin and Bitcoin-related products over the past week. According to the analyst, the majority of the funds closed their short positions at the end of last week and the beginning of this week, returning to the long side.
The analyst stated that this reversal could be a significant “bottoming signal” for the market. Van Straten also argued that Arthur Hayes’ criticisms of Tether are important for market psychology, and that Hayes’s claim that Tether is heading for bankruptcy is untrue.
James Van Straten argued that Tether’s reserve structure doesn’t support Hayes’s claims, pointing to Tether’s Q3 2025 report. The analyst argued that even if a 30% decline in the value of its gold and Bitcoin portfolio wipes out Tether’s $6.8 billion buffer, the company would still have $158.4 billion in core assets, covering 91% of its liabilities.
*This is not investment advice.