Short sellers in the US stock market have placed a $11 billion bet, believing that the cryptocurrency market will not last, and are increasingly shorting stocks as they rise

According to the latest report released by S3 Partners, the total short position of cryptocurrency-related stocks has increased to nearly $11 billion year-to-date, with over 80% of the short positions concentrated in "Bitcoin holders" MicroStrategy and digital currency exchange Coinbase.

As Bitcoin has risen by over 65% year-to-date, driving a general increase in cryptocurrency-related stocks, short sellers betting on the decline of the above-mentioned stocks have accumulated unrealized losses of $6 billion. However, they are still increasing their short positions and remain resolute in their bearish stance.

Ihor Dusaniwsky, Managing Director at S3 Partners, stated in the report: "Short sellers betting on the decline of cryptocurrency-related stocks have been shorting on rallies, either expecting the rise in Bitcoin to be unsustainable or using short positions as a hedge."

In the past 30 days, despite the rise in stock prices of companies like MicroStrategy, short sellers have increased their short positions. Specifically for MicroStrategy, shorts have bet $974 million, completely offsetting the closing of short positions caused by the rise in stock prices during the same period. Currently, short positions in MicroStrategy account for approximately 20% of its outstanding shares, making it one of the most shorted stocks in the U.S. market.

Analysis suggests that if short sellers are wrong in their bets on cryptocurrency-related stocks, they may face even greater losses, especially if it triggers a short squeeze. According to S3's report, MicroStrategy, Coinbase, and Cleanspark may face a short squeeze due to their rising stock prices and limited stocks available for shorting. As of Tuesday's U.S. market close, year-to-date, MicroStrategy's stock price has risen by over 170%, Coinbase by about 70%, and Cleanspark by over 110%.