According to 10x Research’s Markus Thielen, only 44% of net inflows into U.S. spot Bitcoin ETFs, which total around $39 billion since their launch in January 2024, have been for long-term investments. Approximately $17.5 billion reflects long-only buying, while 56% is attributed to arbitrage strategies involving short Bitcoin futures. Thielen suggests that true demand for Bitcoin in multi-asset portfolios may be significantly overestimated in the media. The majority of ETF activity is driven by traders capitalizing on funding rates rather than long-term investments. Recently, funding rates have fallen, leading hedge funds and trading firms to unwind existing ETF positions, resulting in four consecutive trading days of outflows totaling $552 million. This situation negatively affects market sentiment, as such outflows may be misinterpreted as bearish. However, Thielen notes that unwinding these positions is market-neutral, and some genuine long-only buying has risen since the U.S. presidential election, even as retail trading volumes decline.

Source 🔗