The mystery of Bitcoin spot ETF: Behind the inflow of funds and price fluctuations
Surprise! Bitcoin spot ETF: The strange game between capital inflow and price
If you observe the Bitcoin spot ETF, you will find that during April and May, funds sometimes flowed out and sometimes flowed in. However, in the past week, it has often been in a state of outflow, which has led to the market crash. There was even such an article on June 18th, which aims to explore why the price of Bitcoin ETF has not risen despite the continuous inflow of funds.
One of the most likely reasons is cash and arbitrage trading. Some people have noticed that many of the investors in Bitcoin ETF are not investors who buy and hold for a long time, but hedge funds. Hedge funds often have complex trading concepts. Generally speaking, we would think that the increase in the purchase of Bitcoin spot ETF means that someone has converted US dollars into Bitcoin and will not exchange it out at any time, which may lead to an increase in the market value of Bitcoin. But in fact, these hedge funds may be operating by shorting Bitcoin in the futures market while deploying Bitcoin in the spot market. They have built up an increasingly large net short position in Bitcoin futures. Their real purpose is not to profit from the rise of Bitcoin, but to capture the price difference between the two by going long on Bitcoin in spot ETFs and shorting futures with the same amount, thus establishing a near-neutral position. This shows that there is a deviation in pricing between the futures market and the spot market, and hedge funds use this to make profits.
Therefore, some people infer that the inflow of Bitcoin spot ETFs during this period is actually just a neutral net position established by arbitrageurs, and will not affect the price. From the actual situation, during the period of continuous inflow of Bitcoin spot ETFs, Bitcoin did not rise sharply, but fluctuated frequently.
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