Over $5 Billion Invested in Bitcoin ETFs Driven by Directional Bets

U.S.-listed spot bitcoin ETFs have attracted significant investments recently, with inflows totaling:

  • $2.97 billion in April
  • $2.64 billion in May so far

This brings the total net inflow since January 2024 to over $41 billion.

Data analysis indicates that these investments are primarily driven by bullish directional bets rather than market-neutral arbitrage strategies. Key points include:

  • Institutions typically use ETFs for cash and carry arbitrage but current trends show a shift.
  • Leveraged funds reduced net short positions from 17,141 contracts to 14,139 since early April.
  • CFTC data shows no significant increase in short positions among leveraged funds.

The changing nature of ETF inflows suggests large investors are using them to express a positive outlook on bitcoin's future price movement. Bitcoin is currently priced at $102,700 according to CoinDesk data.