BlackRock has been buying Bitcoin spot in large amounts in recent days, with a net purchase of $187 million on September 25 and $94 million on September 26. So why didn't they buy Bitcoin when it was $50,000 before, but chose to buy it in these two days?

Let's look at the following figure 1. In fact, BlackRock's timing of buying Bitcoin spot is still regular.

That is, it is almost at the end of every month. The question is why it is at the end of the month instead of the beginning of the month?

The reason lies in the price difference between CME futures Bitcoin and Coinbase spot Bitcoin. See Figure 2.

Almost every time at the end of the month, when CME futures are newly opened, the price of futures is often higher than the spot price, which brings arbitrage space to many institutions, such as BlackRock. And this kind of arbitrage is a very certain thing.

I blindly guess that their way of arbitrage is to short futures and buy spot, so we have seen that BlackRock has been buying Bitcoin like crazy in the past two days, instead of entering the market in large numbers when the price is lower.

However, as more and more arbitrage participants participate, the price difference will tend to zero, that is, there is no profit to be arbitrage, so what will happen at this time?

Let's continue to look at Figure 3. If we compare the two pictures before and after, we will find that the arbitrage is almost at a high point of the stage price when it starts.

So, what will happen next? Needless to say, you can guess it.

Although both China and the United States are cutting interest rates, the cryptocurrency market is still short of money, which means there is no liquidity in the jargon, so large institutions like BlackRock only do some things with high certainty: arbitrage!

Instead of always going long on the spot, when the arbitrage is nearing the end, there are basically some big positives. I didn't investigate the previous few times. On July 29, Trump gave a live speech at the Bitcoin Conference, and their spot also escaped the highest point!

I hope BlackRock will look better this time!