Markus Thielen, the CEO of 10x Research, has revealed that only 44% of spot BTC exchange-traded fund inflows are tied to long-term investments. The crypto research firm acknowledged that only $17.5 billion of spot Bitcoin ETFs represented genuine long-term buying.
Thielen maintained that the demand for Bitcoin as a long-term asset could be significantly smaller than the media portrayed. He argued that spot Bitcoin exchange-traded fund investors have primarily been utilizing the vehicle for arbitrage strategies.
Markus Thielen believes 44% of spot BTC ETFs are for holding
#Bitcoin & @MicroStrategy: The New Favorite Assets for Hedge Funds@BlackRock IBIT, MicroStrategy – what we know …
👇1-21) Although Bitcoin ETFs have attracted $38.6 billion in net inflows since their January 2024 launch, our analysis suggests that only $17.5 billion (44%)… pic.twitter.com/7Bf95P9NpX
— 10x Research (@10x_Research) February 23, 2025
Markus Thielen revealed that less than half of the $39 billion in spot Bitcoin ETFs inflows in the U.S. since their January 2024 launch represented actual long-term buying. He disclosed that only $17.5 billion of the total spot Bitcoin ETFs were used as long-term investments.
Thielen also argued that around 56% of spot Bitcoin ETFs were likely tied to arbitrage strategies, where short Bitcoin futures positions offset inflows. He referred to the positions as “carry trade,” where traders buy spot Bitcoin through ETFs while simultaneously shorting Bitcoin futures and profiting from the difference between spot and futures prices.
Thielen argued that the actual demand for Bitcoin as a long-term asset in multi-asset portfolios was significantly smaller than the media portrayed.
“Rather than reflecting broad-based institutional adoption; the buying and selling for Bitcoin ETFs is primarily driven by funding rates (basis rate opportunities), with many investors focusing on short-term arbitrage rather than long-term capital appreciation.”
~ Markus Thielen, CEO of 10x Research.
The crypto research firm also revealed that the largest holders of BlackRock’s IBIT ETF are hedge funds and trading firms. He believes that the largest holders of IBIT specialize in exploiting market inefficiencies and capturing yield spreads rather than taking outright directional risk.
Thielen highlighted that hedge funds and trading companies had stopped adding inflows to Bitcoin ETFs to justify new arbitrage positions in the midst of low funding rates and basis spreads. He also believes that hedge funds and trading firms were actively unwinding existing positions that no longer offered the profitable arbitrage opportunities seen a few months ago.
According to data from Fairside Investors, spot Bitcoin ETFs saw four consecutive trading days of outflows last week, with $552 billion leaving the products. The firm also revealed that spot Bitcoin ETFs remained range-bound for the week. Thielen argued that “this hurts the market sentiment, as media reports often frame these outflows as bearish signals. He also added that the unwinding process was actually market-neutral since it involves selling ETFs while simultaneously buying Bitcoin futures, effectively offsetting any directional market impact.
Crypto trading platform Bitget revealed that BlackRock’s Bitcoin ETF now controls over 50% of the U.S. Bitcoin ETF market. The firm maintained that BlackRock holds around $56.8 billion in Bitcoin and accounts for 50.4% of all Bitcoin ETF holdings.
U.S. spot BTC ETFs record two consecutive weeks of negative outflows
According to data from SoSoValue, U.S. spot BTC exchange-traded funds have experienced their second consecutive week of over $500 million in outflows leading up to February 21. The firm noted that the 12 spot BTC ETFs recorded $599.41 million in net outflows over the past week. The spot Bitcoin ETFs have continued their negative momentum form the previous week, where they saw $585.65 million in net outflows.
The firm revealed that the U.S. BTC ETFs began the week from February 18 to 21 with $60.63 million in outflows, reversing the positive flows observed on the last trading day of the prior week. The negative momentum intensified over the following two days, with increased outflows of $70.07 million and $364.93 million, the last being the highest net outflow observed in February so far. The momentum followed on Friday, February 21, with investors withdrawing an additional $62.77 million.
The crypto platform also highlighted that Bitcoin ETFs have recorded $1.1 billion in net outflows since February 6, which makes this month the worst month for withdrawals since their inception over a year ago.
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