Raoul Pal, CEO of Real Vision, claims that about two-thirds of net inflows into physical Bitcoin exchange-traded funds (ETFs) could come from arbitrage.
“If this is correct, it means the majority of ETF flows are just arbitrageurs and retail is not yet the primary driver,” Pal said in a June 11 post, referring to data presented by cryptocurrency analyst and MV Capital partner Tom Dunleavy. said. .
Data shows that the ‘top 80 holders’ of US-based spot Bitcoin (BTC) ETFs were hedge funds, which raise funds from a variety of institutional and individual investors.
According to Farside Investors data, 80 companies collectively hold $10.26 billion worth of spot Bitcoin ETF shares, compared to $15.42 billion in net inflows since the spot Bitcoin ETF launched on January 11. This corresponds to about two-thirds of.
International hedge fund Millennium Management held $1.94 billion worth of Bitcoin ETF shares, the largest holding of any company. On May 16, Bitcoin was held by holding stocks of Bitwise, Grayscale, Fidelity, BlackRock, ARK, and 21Shares ETFs. ETF holdings were distributed among several issuers.
However, others point to Pal’s argument, highlighting that the top 10 Bitcoin ETFs in the US, excluding Grayscale Bitcoin Trust (GBTC), have $42 billion in assets under management and a short interest on CME. Objected.
Cryptocurrency trader Joseph B.
“We know that the major publicly traded hedge funds are primarily doing arbitrage,” Pal argued. “They’re not really directional risk takers.” That is, traders who make decisions based on the expected direction of the Bitcoin price.
Related: With the price of BTC exceeding $71,000, Bitcoin ETFs are attracting attention around the world.
Arbitrage involves finding short-term opportunities by looking for discrepancies between the net asset value of a spot Bitcoin ETF and the price of the underlying asset, Bitcoin.
“One thing that jumps off the page when you read this list is that most of these people are not ‘buy and hold’ investors,” added Carlos Zendejas, CEO of Deep Q Digital.
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This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.