Cryptocurrency analyst James Van Straten spoke with three hedge fund managers last week to discuss where hedge funds stand after Bitcoin’s sell-off.
Funds that made big gains during the decline are now in a complete reversal, the analyst said.
Van Straten said all the hedge funds he spoke to made significant profits from short positions opened in Bitcoin and Bitcoin-related products over the past week. The analyst said most funds had exited their short positions over the weekend and early this week, returning to the long side.
The analyst said the reversal could be an important “bottoming signal” for the market. Van Straten also argued that Arthur Hayes’ criticism of Tether is important to market sentiment, and that Hayes’ claims that Tether is headed for bankruptcy are untrue.
James Van Straten pointed to Tether’s Q3 2025 report and argued that Tether’s reserve structure does not support Hayes’ claims. The analyst argued that even if the value of its gold and Bitcoin portfolio fell by 30% and Tether’s $6.8 billion buffer was wiped out, Tether would still have core assets of $158.4 billion, which could cover 91% of its liabilities.
*This is not investment advice.
