What's going on?

Hedge funds are upping bets that hard-pressed bitcoin miners will fail.

What does this mean?

It’s a rough time to be a bitcoin miner: sure, they don�t have to head down dusty shafts like real miners � but running a network of supercomputers to solve calculations and create new coins isn�t a walk in the park either. For one, the price of bitcoin has dropped by about two-thirds this year, which means that miners� rewards are thinning out. And for another, the cost of powering those energy-hungry computers is only going up right now. Plus, the meltdown of cryptocurrency exchange FTX probably hasn’t done much to cheer up the miners either � especially since some of them have taken out loans to expand operations. Those injuries mean that hedge funds smell blood in the water, and they�re betting that shares in crypto miners will drop even further. Case in point: a key measure of those bets, called short interest, jumped sharply in recent weeks for Marathon Digital, one of the biggest US-listed miners.

Why should I care?

For markets: Crypto�s cooling.
The shockwaves set in motion by the FTX debacle are still hitting crypto markets. In fact, the latest data from Binance shows that demand for one key type of bitcoin contract � a darling of speculators and a prime indicator of trader sentiment � has taken a nosedive since the start of November. And that makes sense: analysts think that big institutions will keep crypto at arm�s length until the FTX fallout has fully run its course.

The bigger picture: Patience is a virtue.
Cheer up, crypto buffs: you might not have to wait too long for the market to bounce back, with most big banks and investment managers forecasting a pickup in 2023. Some analysts reckon that while bitcoin could go as low as $10,000 � from its current price tag of around $17,000 � it should hit around $30,000 in the second half of 2023.