It’s been widely reported that hedge funds are holding large short positions in the VIX, and the Bitcoin phenomenon has received even greater attention.
The chart of the NYSE Bitcoin Index ($NYXBT) is overlaid with a chart of the Volatility Index, and includes a graph of their relative performance. It shows the incredible rise in Bitcoin this year and the deep drop in volatility.
Could it be that hedge funds are, as Dennis Gartman might say, short of the VIX in Bitcoin terms? Not likely, of course, that would require enormous positions in Bitcoin, but it would have been a profitable pair trade this year.