The Bitwise XRP ETF has delivered a quietly remarkable setup: short interest in this nascent crypto product has exploded by more than 560% over the past month, yet the fund itself is grinding higher, closing Tuesday at $15.83 — up 8% from a month ago and adding 2.3% on the week.
Short positioning is the story right now, and the scale of the move demands attention. Estimated short interest has surged from roughly 27,000 shares in mid-March to 368,000 shares — a tenfold increase in seven weeks. As a share of the free float, that lands at approximately 6.1%, a level that earns real scrutiny for any ETF. The most striking step-change came around April 23, when short positions more than doubled in a single session, jumping from under 30,000 to over 43,000 shares, and kept climbing. The ORTEX short score, at 38.4, has risen materially over the past two weeks — it was at 32.4 on April 22 and ticked above 40 briefly on April 24 — reflecting that accumulating pressure.
The borrow market, however, tells a looser story. Despite that dramatic build in short positions, availability is extremely wide: the lending pool holds roughly 1,539% of estimated short interest, meaning there are approximately fifteen shares available to borrow for every one currently shorted. Cost to borrow has drifted higher — now at 11.5%, up about 20% from a month ago and at a six-week high — but that is modest for a product this young and volatile. The lending market is not tight; shorts can still build positions without paying a punishing premium. This combination — heavy directional positioning with ample borrow supply — means there is no structural squeeze pressure in place at this time.
Options traders remain firmly bullish. The put/call ratio has ticked up to 0.19 this week, slightly above its 20-day average of 0.16, but the deviation is minor — less than 0.6 standard deviations. The 52-week high on the PCR is only 0.31, which illustrates just how call-dominated this market has been since the ETF launched. Participants reaching for upside protection have consistently overwhelmed those hedging the downside. That call skew aligns with the broader crypto ETF narrative: retail and institutional appetite for XRP exposure through a regulated wrapper remains a clear tailwind.
The tension the data presents is structural: a fund whose price is rising is simultaneously attracting a growing cohort of short sellers. The likely explanation is basis trading or hedging activity rather than outright directional conviction against XRP — sophisticated participants may be going short the ETF while holding XRP spot exposure elsewhere, or using it as a liquid hedge for broader crypto book risk. The wide borrow availability supports this reading; if the shorts were driven by fundamental bearishness, the borrow pool would likely be tighter.
The metric to track from here is whether the cost to borrow continues to drift upward as short interest builds. A meaningful move above current levels — especially if paired with availability tightening — would suggest the hedge/basis trade is getting crowded. For now, the positioning looks mechanically heavy rather than fundamentally hostile.
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