A study by 10x research suggests that only 44% of Bitcoin ETF inflows are meant for long-term investments.
Introduction to Bitcoin ETFs
In January 2024, U.S. markets introduced Bitcoin ETFs, attracting $39 billion. However, only $17.5 billion of this amount remained as steady long-term investments.
Hedge Fund Activities
Hedge funds and trading firms hold significant positions in BlackRock’s IBIT ETF, often profiting from market inefficiencies. These organizations favor short-term strategies like arbitrage over long-term beliefs.
Continuation of Outflows
Last week saw four straight days of Bitcoin ETF outflows totaling $552 million. This raises concerns among some investors, but hedge funds manage their activities by selling ETF positions and buying Bitcoin futures.
Prospective investors should understand that major market participants hold Bitcoin ETFs for limited durations before exiting, potentially making the market more unstable than often portrayed in media.
