As we reported on Jan. 7, CFTC data for leveraged funds - which consists largely of hedge funds and various money managers - showed a short of around $14mm, or around a quarter of the total open interest. "In other words", we summarized, "spec investors have used the futures contracts to establish Bitcoin shorts."

Just a few days later, following what in retrospect appears to have been overblown and misinterpreted news out of South Korea that the country was preparing a bill to ban bitcoin exchanges, something it has since denied  (for now, at least), as well as frayed nerves after the shuttering of the allegedly fraudulent crypto-exchange platform BitConnect, those bitcoin shorts were generously rewarded, generating profits as much as 40% when bitcoin tumbled to a low of $9000 last week, before rebounding modestly since.