DeFiance Capital founder: Crypto hedge funds have at least $5 billion in liquid capital to deploy into the market, which may have driven the recent surge

ChainCatcher news, DeFiance Capital founder and CEO Arthur Cheong stated on his social platform that many people are surprised by the strength of this rebound, but in such a low liquidity environment, most movements are primarily position-driven.

According to the latest VisionTrack Galaxy institutional cryptocurrency hedge fund and risk report, the total AUM of cryptocurrency hedge funds is $10 billion. From conversations with many peers, it appears that most funds have long positions of about 50% or less, which means that at least $5 billion in liquidity can be deployed into the cryptocurrency space in a short time, potentially explaining the recent rise.

In the medium term, it remains to be seen how the market will absorb over $5 billion in structural sell-off flow from FTX, Celsius bankruptcy assets, Bitcoin miners, U.S. government sell-offs, and potential Mt. Gox distributions.