Arbitrage Trading Dominates Bitcoin ETF Inflows, Claims Real Vision CEO Raoul Pal
Summary:
Real Vision CEO Raoul Pal asserts that arbitrage trading may account for around two-thirds of the net inflows into spot Bitcoin exchange-traded funds (ETFs). Citing data from crypto analyst Tom Dunleavy, Pal suggests the top 80 U.S. Bitcoin ETF holders, primarily hedge funds, hold about $10.26 billion in spot Bitcoin ETF shares. His claim disputes critics who argue that the basis trade makes up less than 15% of overall ETF flows. Pal insists the flow majorly stems from arbitrage and affirms these firms are not simply risk takers who base decisions on Bitcoin’s price direction.
Real Vision CEO Raoul Pal asserts that arbitrage trading could be responsible for roughly two-thirds of the net contributions into Bitcoin (BTC) spot exchange-traded funds (ETFs). Pal's comments on a June 11 X post highlight data from crypto analyst and MV Capital partner Tom Dunleavy, which suggests that the bulk of ETF traffic could stem from arbitrage activity rather than retail-driven demand. The study highlights the top 80 American Bitcoin ETF holders, mainly hedge funds backed by institutional and individual investors, as collectively holding around $10.26 billion in spot Bitcoin ETF units. This figure represents about two-thirds of the net contributions of $15.42 billion since the introduction of spot Bitcoin ETFs on January 11th, based on data from Farside Investors. Millennium Management, an international hedge firm, occupies the pole position with Bitcoin ETF units worth $1.94 billion. On May 16, the firm diversified its Bitcoin ETF portfolio across multiple issuers, including Bitwise, Grayscale, Fidelity, BlackRock, and ARK and 21Shares' ETFs. Contrary to Pal's assertions, critics argue that the aggregate of US Bitcoin ETFs’ assets, excluding the Grayscale Bitcoin Trust (GBTC), stand at $42 billion, along with the short interest on CME. “While recent inflows could be stemming from basis trade, it accounts for less than 15% of overall ETF flows,” counters crypto trader Joseph B. Pal maintains that the flow is majorly from arbitrage, given the principal activity of the cited hedge funds. They are not necessarily risk takers guided primarily by Bitcoin’s price projections. Carlos Zendejas, Deep Q Digital CEO, further emphasizes that most of these players are not "Buy and Hold" investors. This information is subject to investment risk and should not be interpreted as investment or trading advice. All potential investors are advised to conduct independent research before making a decision.
Published At
6/12/2024 9:28:04 AM
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