Why do people feel that it is a bit of a bear market now?
In the past month, the net inflow of Bitcoin ETFs exceeded $2.5 billion, but the price fell from $71,400 (May 20) to $65,200 (June 19).
Why did $2.5 billion of ETFs flow into the market and the price of Bitcoin and Ethereum rose in US dollars?
Everyone thought that such a large net inflow of funds might pull up the market, but the result was just the opposite, and the market was in a mess. There is only one possibility, cash and carry trading.
ETF flows: After such a long period of consolidation, capital inflows have recently restarted a strong upward trend. ETH has finally rebounded and Bitcoin is also sideways.
Who currently holds ETFs?
The top 80 holders of Bitcoin ETFs are not just buy-and-hold. On the contrary, most of these people are hedge funds. They often have complex trading ideas.
CME Bitcoin futures open interest is also close to a record high of $11.5 billion.
Hedge funds have established increasingly large net shorts in Bitcoin futures (CME Bitcoin futures alone have $6.3 billion shorts). What does this mean?
More and more traders are starting to trade Bitcoin in cash and on their own. This is an arbitrage strategy, where they take advantage of the price difference between two similar securities.
They use spot ETFs to go long on BTC and short the same amount, creating a neutral position. Therefore, the price risk is zero and the profit potential is huge (although the impact on the price is theoretically zero), but this operation explains the current market very well.
If this is the case, it means that the funds of spot ETFs are only in the hands of arbitrage. So there is actually no actual cash inflow in the market now, at least no large capital inflow.
Finally, if you are a newcomer in the cryptocurrency circle and you are excited to rush into the cryptocurrency circle when you see BTC hit a record high before, then I suggest you pay attention to me first, learn the knowledge of the cryptocurrency circle with me, and make up for your basic skills.
A tall building is built from the ground, and glory can only rely on yourself. Only by laying a solid foundation can you go further.
