As a researcher with a background in financial markets and experience in analyzing institutional investment trends, I find Raoul Pal’s observations on the predominance of arbitrage activities in Bitcoin spot ETFs intriguing. The data he has presented, as well as that from Tom Dauvley, highlights the significant role hedge funds and large institutional investors play in this market.
Several studies indicate that a considerable amount of Bitcoin exchange-traded fund (ETF) investments stem from arbitrage activities instead of traditional retail buying.
Raul Pal, the CEO of Real Vision, has drawn attention to this phenomenon using data about the holdings and transaction activities of these funds.
Institutional Involvement And Market Movements
As a crypto investor, I’ve noticed that Raoul Pal, CEO of Real Vision, has brought attention to the significant role of arbitrage activities in the current Bitcoin spot ETF market. His insights are supported by data suggesting that approximately two-thirds of the net inflows can be traced back to arbitrage trading among top institutional investors holding these funds.
After analyzing the actions of the top Bitcoin spot ETF owners in the US, it’s evident that hedge funds and major institutional investors hold significant influence.
According to information provided by Tom Dauvley, who is a managing partner at MV Capital, the top 80 asset managers, predominantly hedge funds, control around $10.26 billion of the $15.42 billion in total new investments. This signifies a substantial concentration of market influence.
As a financial analyst, I can share that among all the investors, Millennium Management holds the largest stake in various Exchange-Traded Funds (ETFs). Their investments span across several ETF issuers with notable names such as Bitwise, Grayscale, Fidelity, BlackRock, ARK, and 21Shares.
Based on Pal’s analysis, the majority of these inflows indicate a tendency toward arbitrage opportunities. Arbitrage in the context of ETFs refers to profiting from the differences in price between an ETF’s net asset value and the value of its underlying Bitcoin.
As an analyst, I’ve noticed that there is ongoing discussion regarding the impact of arbitrage on the overall movements of Exchange-Traded Funds (ETFs), specifically those invested in Bitcoin in the US market. However, it is important to note that some market participants, such as myself as a crypto trader, believe that arbitrage may account for a relatively small percentage – under 15% – of total ETF flows when considering the entirety of the US Bitcoin ETF landscape, which collectively oversees more than $42 billion in assets.
Hmmmm don’t necessarily agree. Excl GBTC, there is 605,000 BTC ($42 Billion)in ETFs
As a researcher investigating the short position data on Bitcoin (BTC) futures traded at the Chicago Mercantile Exchange (CME), I’ve found that approximately 91,000 short contracts are currently held, equivalent to around $6 billion in notional value. This implies that a significant portion of institutional trading in BTC might be taking place through these shorts.
The recent inflows could certainly be attributed to the…
— Joseph B (@Packin_Sats) June 11, 2024
Arbitrage Dominates Bitcoin ETF Landscape
At present, Bitcoin is valued at $69,523, representing a 3.5% rise over the past 24 hours following the release of a recent CPI report suggesting decreasing inflation rates in the United States. Notably, this growth signifies a rebound from a seven-day downturn in Bitcoin’s value.
As a researcher studying the Bitcoin market, I’ve observed noticeable outflows from US-listed spot Bitcoin Exchange Traded Funds (ETFs) preceding recent price drops. Specifically, on Tuesday alone, investors withdrew approximately $200 million. This trend follows earlier withdrawals this week, interrupting a streak of net inflows.
As an analyst, I’ve observed some notable fund flow trends in the Bitcoin investment space recently. Specifically, Grayscale’s Bitcoin Trust (GBTC) recorded substantial withdrawals amounting to approximately $121 million. Simultaneously, Ark Invest’s ARK Bitcoin ETF (ARKB) reported net outflows totaling around $56 million.
The data from SoSoValue indicates the following: Bitwise’s Bitcoin ETF by the name of BITB recorded a withdrawal amounting to $12 million. Fidelity and VanEck reported smaller outflows, in the range of single digits. In contrast, BlackRock’s iShares Bitcoin ETF did not report any net inflows or outflows on that particular day.
For the past 19 days up until Monday, there have been uninterrupted net investments into the 11 U.S. Bitcoin spot ETFs, amounting to outflows of approximately $65 million. Since their launch in January, these ETFs have collectively attracted net investments equating to a total of $15.42 billion.
Featured image created with DALL-E, Chart from TradingView
Read More
- SOL PREDICTION. SOL cryptocurrency
- USD ZAR PREDICTION
- AVAX PREDICTION. AVAX cryptocurrency
- MNT PREDICTION. MNT cryptocurrency
- ANKR PREDICTION. ANKR cryptocurrency
- OP PREDICTION. OP cryptocurrency
- VIC PREDICTION. VIC cryptocurrency
- Dogecoin And Shiba Inu Fear & Greed Index Drops To Neutral, Time To Buy?
- INV PREDICTION. INV cryptocurrency
- SUPER PREDICTION. SUPER cryptocurrency
2024-06-13 03:12