Short interest in Bitcoin futures has increased even as new venues for trading in them are being launched.

According to a WSJ report, short bets at CME Group’s Bitcoin Futures market have jumped following a rally in the original cryptocurrency’s price. Large trading firms are leading the charge against Bitcoin. The WSJ report states that there are three times as many bearish bets as last week made by such firms against Bitcoin. Hedge funds and money managers also accounted for 14% more bearish bets on Bitcoin as compared to last week, the report states.

Simultaneously the Commodities and Futures Trading Commission (CFTC) also approved LedgerX’s application to trade physically-settled bitcoin futures. This means that traders will receive physical delivery of Bitcoin upon contract expiration. (Futures at the CME Group are cash-settled).

The move is a positive sign for other firms that have applied to operate similar futures markets and could inject fresh liquidity into the markets. Of note in this list are ICE-backed Bakkt, which is scheduled to launch next month, and ErisX. LedgerX’s Chief Operating Officer Juthica Chou told online publication Coindesk that her firm intended to become the first firm to provide physically-settled Bitcoin futures.    

Bitcoin price has increased rapidly in the last week after social media behemoth Facebook announced plans to introduce a blockchain and cryptocurrency on its network. The project, which is called Libra, borrows heavily from the designs for existing cryptocurrencies and is considered a validation of sorts for the ecosystem.

As of this writing, Bitcoin was changing hands for $11,350 per pop at Coinbase, North America’s biggest spot exchange. Within the last week, Bitcoin price has jumped by 24% at the same exchange.

A Hedging Strategy in Bitcoin Futures?   

In liquid and well-capitalized markets, futures are precursors to price movement in spot markets. But the volume of trading in bitcoin futures is thin and they are mostly used as a shorting instrument against the cryptocurrency.

With this context in mind, the players involved in placing short bets against Bitcoin are important. The WSJ report states that retail investors are mostly long Bitcoin while seasoned institutional firms are betting that its price will fall in the long run. As with other data related to Bitcoin, this piece of information should also be taken with a grain of salt. A Bitwise report earlier this year showed that cryptocurrency exchanges have a habit of pumping up trading volumes.

Then there’s the fact that opinion about Bitcoin’s long-term prospects is split among institutions and individuals. Even as they take a short position against the cryptocurrency, institutional firms stand to profit handsomely by betting in its favor. Indeed, the WSJ report points out that the increase in short bets could simply be a hedging strategy employed by institutional firms to manage risk.