Hedge funds have amassed a record 1.29 million net short Treasury futures contracts, making every upcoming CPI print a potential market flashpoint. Get a cooler one, and the rush to cover could send bond prices surging in hours. They follow price signals, and throughout mid-2026 the signal was clear: bond prices were falling, so short bonds. Short-covering rallies in bond markets can be sharp and swift precisely because the buyers are not value investors arriving on fundamentals. For crypto markets specifically, the relationship with bond yields has grown more consequential as institutional capital has entered the space.