The introduction of spot Bitcoin ETFs in the US has seen a dominance of arbitrage strategies, as noted by 10x Research.
Arbitrage Opportunities in ETFs
The bulk of the inflows into spot Bitcoin ETFs, about 56%, is likely associated with arbitrage strategies. Traders use the 'carry trade' method by purchasing spot Bitcoin via ETFs while simultaneously shorting Bitcoin futures to profit from the spread.
Impact on Long-term Investments
According to Markus Thielen of 10x Research, this indicates that there is much less of a need for Bitcoin in multi-asset portfolios for the long term.
Market and Media Coverage
The market saw an outflow of $552 billion from ETF products last week, even as Bitcoin's price remained stable. This impacts market sentiment; however, unwinding remains market-neutral.
The current state of the Bitcoin ETF market highlights a shift in investment strategies, with arbitrage outweighing long-term investments.
