PANews reported on March 21 that according to Cointelegraph, on March 20, the Bitcoin long positions on the Bitfinex exchange soared to 80,333 BTC (equivalent to $69.2 billion), reaching the highest level in nearly six months. Since February 20, the Bitcoin margin long positions have increased by 27.5%, which has led to market speculation: the 12.5% rise in Bitcoin price from the $76,700 low on March 11 may have been driven by leverage and may be difficult to sustain.

However, Bitcoin prices do not always move in sync with the leveraged long positions on Bitfinex. For example, in the three weeks leading up to July 12, 2024, large investors increased their margin long positions by 13,620 BTC, but Bitcoin prices fell from $65,500 to $58,000. Similarly, in the two weeks prior to September 11, 2024, margin long positions increased by 8,990 BTC, while Bitcoin prices fell from $60,000. In the long run, these savvy investors have timed the market well, as Bitcoin prices ultimately broke through $88,000 in November 2024, while margin long positions decreased by 30% before the end of the year. Essentially, these traders have strong profitability, but they exhibit higher risk tolerance and patience than the average investor. Therefore, an increase in leverage demand does not necessarily translate into upward pressure on Bitcoin prices.

Furthermore, the borrowing cost of Bitcoin remains relatively low, creating opportunities for market-neutral arbitrage trades, where traders can profit from the interest rate differential without directly bearing the risk of price fluctuations. Currently, the annualized cost of borrowing BTC for 60 days on Bitfinex is 3.14%, while the funding rate for Bitcoin perpetual contracts is 4.5%. In theory, traders can utilize this spread through "cash and carry arbitrage" to generate profits without directly exposing themselves to price risk.