A Bitcoin fund can be profitable across its portfolio and still be forced to close a position when the exchange holding the losing leg cannot see gains elsewhere. A common example is a fund short Bitcoin at CME and holding a similarly sized long on Hyperliquid. If Bitcoin falls, the CME short gains value while the Hyperliquid long needs more collateral. The platforms do not automatically offset those balances, so the fund must move funds or close both positions before liquidation begins.
Hedges are designed to reduce exposure to Bitcoin’s direction. But when gains and losses sit in separate accounts, a portfolio can become exposed again if one side is closed first. The risk is greatest during sharp market moves, withdrawal delays or transfer suspensions: a fund may have enough assets overall but be unable to get them to the account that needs margin.
How a 20% Bitcoin decline can break a hedge
Assume a fund holds a Bitcoin long on Hyperliquid and a Bitcoin futures short at CME, with a notional value of $4.5 million on each side. If Bitcoin falls 20% and the two contracts track each other closely, the short gains about $900,000 while the long loses roughly the same amount. The portfolio’s net price-driven gain or loss is close to zero—the intended outcome of the hedge.
Each platform, however, calculates margin under its own account rules. Hyperliquid sees a losing long and may require more collateral. CME records a profitable short, but those gains sit within a separate account, margin and settlement structure. The fund must withdraw the CME proceeds or close both legs in time to support the Hyperliquid position.
If withdrawals are delayed, transfers are blocked or the profitable position cannot be closed quickly, the fund can end up with a cash shortfall in one account despite having assets elsewhere. If Hyperliquid liquidates the long first, the fund may be left with only its CME short. A subsequent Bitcoin rebound would then generate losses because the long hedge is gone, turning a low-directional-risk position into a one-way exposure.
CoinRoutes CEO Ian Weisberger has pointed to disorderly liquidations during the October 2025 crypto-market decline as an example. Some traders believed their positions were hedged, but when one platform closed one side, the position on the other platform lost its protection. The problem may not lie in the strategy itself; funds needed to maintain it may simply be held elsewhere.
How $1 million can support $9 million in positions
The impact of split collateral grows when funds combine borrowing with futures and perpetual contracts. Weisberger described a fund with $1 million in USDC that could, in theory, control about $9 million in Bitcoin exposure.
In this example, the fund puts up $1 million of its own capital and borrows another $2 million, giving it $3 million in available funds. It allocates $1.5 million to CME and $1.5 million to Hyperliquid, then uses derivatives to establish $4.5 million of Bitcoin exposure on each platform: long $4.5 million on Hyperliquid and short $4.5 million through CME futures. The $9 million in combined notional positions is supported by $1 million of the fund’s capital, $2 million of borrowing and derivatives leverage.
The fund is not necessarily betting that Bitcoin will rise or fall. If Bitcoin gains 10%, the long would theoretically make about $450,000 and the short lose about $450,000, assuming the contracts move in line. The intended return may instead come from the basis between futures and spot prices, perpetual-contract funding rates or other small differences between markets.
But a hedge works only if it holds up in live trading. Futures and perpetual prices can temporarily diverge, while funding rates can rise quickly. Even a 1% difference between two $4.5 million positions amounts to about $45,000. The prices may eventually converge, but the fund still needs enough collateral to withstand the interim move.
CME will not waive its collateral requirements because a fund has a profitable position on Hyperliquid. Nor will Hyperliquid automatically count profits that have not been transferred from CME as available margin. Holding more cash or collateral on both platforms can reduce this risk, but raises the cost of capital. Using each dollar of capital to support larger positions makes the strategy more dependent on moving funds quickly when needed.
Why margin is difficult to share across platforms
Traditional prime brokers have long helped hedge funds coordinate financing, collateral and trades across markets. Crypto remains divided among independent platforms. A fund trading CME Bitcoin futures, Hyperliquid perpetuals and spot Bitcoin on another venue will generally have to meet each platform’s margin and settlement requirements separately, even when the positions form a single strategy.
Swiss institutional prime broker CRX Trade is seeking to coordinate these arrangements. Built on CoinRoutes technology, the platform serves professional traders in Bitcoin, stablecoins and tokenized assets across crypto and traditional markets, including Hyperliquid and CME. Its approach is to coordinate positions and financing through one account rather than require funds to place capital separately with each platform.
Weisberger said the risk system assesses both a fund’s total position size and the portfolio’s combined residual directional exposure. That is one reason a lender might finance a fund with notional exposure equal to nine times its original capital: the fund borrows $2 million, not $9 million, and its long and short positions are theoretically offsetting.
CRX’s risk engine tracks portfolio positions and can try to reduce risk before an individual platform triggers a forced liquidation. One method is “delta-neutral liquidation”: closing both sides of a hedge together where possible. For example, if a fund is short Tesla perpetuals while holding an equivalent amount of tokenized Tesla shares, the system can treat the legs as a pair rather than close only the losing side and leave the client with fresh exposure to Tesla. Another approach is to reduce the position contributing most to the portfolio’s directional risk.
Such systems can identify trades intended to operate together and try to prevent one platform from closing only the losing leg. They cannot force a venue to process orders during an outage or guarantee enough counterparties during extreme volatility. Slippage, weaker liquidity and worse execution prices can still cause losses, and platforms retain the right to liquidate positions when margin is insufficient.
Using Bitcoin indirectly to support CME trades
Cross-platform collateral arrangements can also let funds use Bitcoin holdings to support trades in markets that do not accept Bitcoin directly as collateral.
Weisberger’s example involves a client holding $1 million worth of Bitcoin who wants to trade CME futures. The client could transfer the Bitcoin to a crypto platform, sell $500,000 worth and replace roughly $500,000 of exposure through Bitcoin futures or perpetuals. The client would then hold $500,000 in spot Bitcoin and about $500,000 in derivatives, leaving overall sensitivity to Bitcoin prices broadly unchanged. The $500,000 in cash from the spot sale could be routed through CRX’s USDC infrastructure to fund CME trading.
This does not mean the same asset is being fully reused: the client sells half of the original Bitcoin holdings and replaces the exposure with derivatives. But derivatives require margin and incur financing costs, and the positions can still be liquidated if collateral is insufficient.
Weisberger estimated that borrowing cash directly against Bitcoin typically costs about 8%. Replacing part of the spot exposure with derivatives instead incurs costs through futures basis or perpetual funding rates. Those costs may be lower in some circumstances, but funding rates vary, and trading fees and bid-ask spreads also matter. CRX has not provided a full comparison of the costs of the two approaches, so any savings depend on market conditions and financing terms.
Custody outside exchanges has limits
One way to reduce exposure to trading platforms is to keep some collateral off-exchange. Where possible, CRX uses tri-party settlement: an independent custodian holds the assets, the trading platform executes orders, and gains and losses are settled at set intervals.
Weisberger said settlement intervals can be eight or 24 hours. If a platform freezes withdrawals, the exposure directly held there may then be limited mainly to unsettled profits and losses, rather than the client’s full collateral. The actual protection depends on the agreements and settlement arrangements, however. A fund may still be unable to close positions promptly if a platform goes down.
The structure also involves more parties. CRX Trade is operated by RAS Capital, an entity associated with Swiss financial intermediaries and affiliated with VQF, a self-regulatory organization recognized by the regulator. CRX is not a bank or securities firm and does not lend directly; independent lenders using the platform provide financing. Weisberger said client assets are held in segregated wallets and exchange sub-accounts, with legal ownership remaining with clients.
When a client borrows, however, a lender obtains a lien over portfolio collateral under a separate agreement. The Bitcoin remains the client’s property, but the lender can claim pledged assets under the agreement if the client defaults. Borrowing limits, how assets are valued and when a lender can exercise its rights are set by the specific contract.
Trading platforms have their own margin rules and customer agreements, while custodians use separate contracts governing where assets are held and who can access them. Bringing these relationships into one account does not remove the underlying legal and funding arrangements; it makes them easier to coordinate.
CRX has not disclosed the full custody and lending agreements that would apply if a platform, custodian or lending partner became insolvent. Public information therefore does not establish how clients’ assets would be recovered. Segregated wallets may help demonstrate ownership, but the outcome would depend on the contracts and applicable law. CRX has also not clearly addressed whether collateral may be rehypothecated. Keeping assets off an exchange can reduce one type of exposure, but it does not guarantee that funds will always be immediately available to meet a margin call.
Borrowed funds still have to be repaid
Leveraged positions raise a further issue: lenders eventually expect repayment. Weisberger said loans arranged through CRX typically run for 30 to 90 days, with leverage limits, collateral haircuts and loan-to-value ratios set when the funds are borrowed. At maturity, a lender may decline to renew. The fund would then need to repay the loan or find replacement financing, even if its overall strategy remains profitable.
During the loan term, exchange margin requirements and derivatives funding rates can also change, without necessarily being covered by the original loan agreement. A fund could face a margin call from a trading platform while also having to repay or refinance borrowing secured by the same portfolio collateral. Shared collateral can improve capital efficiency, but it does not override loan agreements or platform rules.
In a sharp market move, a fund may need to send cash to several platforms at once, when transfers can be slower and closing positions more expensive. Coordinating collateral can reduce idle funds and some liquidation risks caused by balances being stuck in separate accounts. It can also allow a fund to support larger positions with less of its own capital. The larger the positions, the more the strategy depends on refinancing, cross-platform transfers, custody arrangements and market liquidity.