We Called It: Hedge Funds Lose $500M in One Day as Circle Explodes in a Violent Short Squeeze.
Actionable Market Insights
Why this report matters
Circle surged 35% following its Q4 2025 earnings release, but the magnitude of the move was not driven purely by the headline numbers. The real catalyst was positioning. Hedge funds had built sizable short exposure into the print, and as we highlighted in our February 20, 2026 Market Updates report, the setup pointed to a high-probability short squeeze rather than a fundamental re-rating. We explicitly projected a strong rebound in Circle shares.
In a follow-up report on February 21, 2026, we further highlighted Circle as one of our “Top Charts,” noting it as a key beneficiary of the rapid asset accumulation in the IQMM Genius Money Market ETF, which raised $18 billion in just a few days. The speed and scale of those inflows materially strengthened the bullish setup. As a result, we were unequivocally pounding the table on Circle’s asymmetric upside risk throughout the week, ahead of the 35% explosive move.
Below, we break down why the moves were so violent, not just in Circle, but also in Coinbase and Bitcoin. While Circle was a clearly flagged bullish setup (a call that alone would have more than paid for a 10x Research subscription), the magnitude of the reaction was driven by positioning dynamics across the broader crypto complex. Importantly, another catalyst is approaching that could reset the narrative, after which markets are likely to refocus and trade more squarely on fundamentals.
Circle (LHS) - Is this the breakout to load up?
