Billions of dollars have flowed into spot Bitcoin on the US list
BTC$102,952.07
Exchange Trade Funds (ETFs) in recent weeks as cryptocurrencies have chalked out a rapid recovery rally of between $75,000 and $100,000.
The majority of investments are likely driven by bold, strategic bullish bets rather than market-neutral arbitrary competitions, data analysis suggests.
According to Data Source SosoValue, 11 SpotETFS raised $2.97 billion in investor funds in April, with an additional $2.644 billion flowing this month. This has resulted in an increase in net inflows of over $41 billion since its establishment in January 2024.
Institutions have historically used these ETFs to set up non-directional arbitrary competitions to benefit from price discrepancies between futures and spot bitcoin markets. The so-called cash and carry arbitrages are purchased and at the same time you sell CME futures to pocket futures premiums while bypassing price directional risk.
However, the influx from early April appears to be driven by bullish bets rather than arbitrage plays. This is reflected in the commitment of the Traders (COT) report issued by the Commodity Futures Trading Commission (CFTC).
The data shows that various types of money managers, including leveraged funds, hedge funds and registered merchandise trading advisors, trimmed net shorts from 17,141 contracts to 14,139 contracts in early April, according to data tracked by Tradingster.
If carry trades primarily drive net inflows, the number of shorts is increasing.
“CFTC data shows that leveraged funds did not significantly increase their short positions, indicating that most flows are directional bets rather than arbitrage,” said Imran Lakha, founder of Options Insight in a blog post published on Deribit.
Changing the nature of ETF inflows suggests that large players use ETFs to express clear market outlook on the future direction of Bitcoin.
According to Coindesk data, Bitcoin last changed his hands at $102,700 on press.
