Bitcoin Stock Exchange Investment Funds (ETF) has experienced $ 3 billion in the last week. The arbitrage strategy, which Hedge funds have long been deemed profitable, no longer works as before, and this affects the price of bitcoin negatively.
Large exits from Bitcoin ETFs
Bitcoin ETFs were seen as a great opportunity for professional investors. The strategy of the market-nephews, which provided high-profiting price difference between CME Bitcoin futures and spot markets, was quite popular last year. Especially in the last four months of 2024, the demand for CME BTC -term transactions has doubled and reached $ 23 billion. In the same period, the price of Bitcoin increased by 60 %and rose to $ 109,000.
However, this lucrative opportunity is weakening. As arbitrage opportunities decreased, investors began to leave ETFs. Last week, 2.3 billion dollars of BTC ETFs were withdrawn and the Bitcoin price fell below $ 86,000.
Standard Chartered Digital Assets Global President Geoffrey Kendrick said in a note published on Wednesday, orum I don’t think that the sales pressure is over yet. A large capitulation (market delivery) has not yet happened. ”
Macroeconomic Factors and Bitcoin Market
According to crypto brokerage firm K33 Research, the price difference between BTC futures and spot BTC has declined to the lowest level since September 2023. This makes it difficult for hedge funds to earn from this Spread.
In addition, the general economic conditions are also negatively reflected in the BTC market. The US Federal Reserve (FED) President Jerome Powell stated that he would keep his interest rates high and US President Donald Trump threatened an additional customs tariffs, creating uncertainty in the market. Walmart’s warnings on consumer demand also shook the investor confidence.
According to JPMorgan analysts, BTC futures are currently approaching the “Backwardation” process. This means that the Spot BTC price is traded above term trading prices and further reduces arbitrage opportunities.
Price pressure is increasing
Hedge funds, which earn with the arbitrage strategy, rapidly sell Bitcoin ETF shares. Last week, there was an output of $ 3 billion from ETFs, which increases pressure on the market. BTC fund providers are forced to sell Bitcoin in their hands to meet the demands of investors. This accelerates the decline by pulling the price of Bitcoin even further.
The BTC traded at $ 86,000 on Thursday and lost 20 %compared to the $ 109,000 summit last month. If the current sales pressure continues, the possibility of a greater decrease may be on the agenda.
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