NEW YORK — Speculators raised net short position on bitcoin futures traded on Cboe Global Markets last week amid a selloff sparked by experts' warnings of a bubble, according to data from the Commodity Futures Trading Commission released late Friday.

Net short bitcoin contracts rose to 1,801 in the week that began Dec. 26, from 1,507 short contracts the previous week.

During the last two weeks of December, bitcoin in the spot market slumped nearly 28 per cent, but still ended the year up about 1,300 per cent.

On Tuesday, bitcoin recovered from recent losses to trade up 3.4 per cent at $13,900 on the Bitstamp platform.

Trading in bitcoin has tended to be volatile. In November, it tumbled almost 30 per cent in four days from US$7,888 to US$5,555. In September, it fell 40 per cent from US$4,979 to US$2,972.

ARK Invest, a New York-based asset manager which oversees exchange-traded funds focused on technology, said in a newsletter that investors had displayed "irrational behavior" with respect to bitcoin, including speculators going on margin to invest in the digital currency.

"Historically, these signs have marked the top, either cyclically or securely, for an asset class," said ARK Invest.

Still, it said the launch of a futures market for bitcoin by CBOE and CME Group Inc (CME.O) last month potentially heralded another era of financial innovation.

It said that if blockchain technology, an open ledger that has underpinned bitcoin, is as fundamental a breakthrough as the internet was when it was first launched, then institutions will start investing significantly alongside retail investors over the next six to nine months.