According to “Cointelegraph”, Raoul Pal, CEO of macro research institution Real Vision, believes that about two-thirds of the net fund inflows of Bitcoin spot ETFs may come from arbitrage transactions, and retail investors are not yet the “key driver” of such fund products. ”.

Pal made this inference based on data shared by cryptocurrency analyst and MV Capital partner Tom Dunleavy. His data shows that the "top 80 holders" of U.S. Bitcoin ETFs mostly belong to hedge funds, and their capital comes from various institutions and individual investors.

Pal wrote on the X platform on Wednesday (12th):

"If this is correct, it means that the vast majority of the fund flows in this ETF are driven only by people engaged in arbitrage activities, and retail investors are not the key driver."

Source: Raoul Pal

The 80 companies collectively hold about $10.26 billion worth of Bitcoin spot ETF shares, which accounts for about two-thirds of the $15.42 billion in net inflows since the Bitcoin spot ETF launched on Jan. 11, according to Farside Investors.

International hedge fund Millennium Management holds $1.94 billion worth of Bitcoin ETF shares, the largest holding of such funds, with the largest allocation according to filings with the U.S. Securities and Exchange Commission (SEC) It is BlackRock’s iShares Bitcoin Trust (IBIT). Millennium Management also holds Bitcoin issued by Fidelity, Grayscale, Bitwise and ARK Invest in partnership with 21Shares Spot ETFs.

However, others have questioned Pal's assertion, pointing out that excluding the Grayscale Bitcoin Trust (GBTC), the AUM of the 10 U.S. Bitcoin ETFs is equal to the total short balance on the CME Group to $42 billion. Cryptocurrency trader Joseph B said:

“It’s true that recent inflows may be attributed to basis trading, but as a whole figure, basis trading accounts for less than 15% of overall ETF flows.”

Pal claimed that he knew the flows from these companies were primarily to carry out arbitrage trades because that’s “primarily what these major listed hedge funds do, and they’re not really directional risk takers,” i.e. based on the expected direction of Bitcoin’s price Traders who make decisions.

Arbitrage trading involves seizing short-term opportunities by discovering the difference between the net asset value (NAV) of a Bitcoin spot ETF and the price of Bitcoin (the underlying asset). Carlos Zendejas, CEO of Deep Q Digital, added:

"When you read this list, one thing that's immediately clear is that the majority of these institutions are not 'buy and hold' investors."

This article Real Vision CEO: Most Bitcoin ETF net inflows may be driven by arbitrage trading first appeared on Zombit.