Bitcoin ETFs in the U.S. Witness Unprecedented $930M+ Daily Outflows as Carry Trades Fall Out of Favor Amid Rising Treasury Yields.

Bitcoin and Ether ETFs Face Record Outflows as Futures Premium Shrinks

Investor interest in U.S.-listed spot bitcoin and ether ETFs took a hit on Tuesday as the appeal of carry trades weakened, following a sharp decline in CME futures premiums.

Bitcoin (BTC) dropped to a three-month low, falling below $87,000, dragging the broader crypto market down. Simultaneously, spot bitcoin ETFs saw an unprecedented wave of redemptions, marking their largest single-day outflows since launching in January 2024.

Data from SoSoValue shows that the 11 U.S. spot ETFs recorded combined net outflows of $937.78 million. Fidelity’s FBTC bore the brunt of withdrawals, with $344.65 million exiting the fund, while BlackRock’s IBIT saw $164.37 million in redemptions. Other ETFs experienced smaller, yet still notable, outflows under $100 million each.

The shift in sentiment stems from a drop in the premium on CME-listed bitcoin futures, which has significantly reduced returns on the once-lucrative cash-and-carry arbitrage strategy. Additionally, BTC and ETH carry trades now offer little advantage over traditional investments, with the U.S. 10-year Treasury note yielding 4.32% at press time.

Institutional investors had previously relied on this strategy—buying spot ETFs while shorting CME futures—to secure risk-free profits from the premium spread. However, with the annualized one-month basis in CME bitcoin futures sinking to 4%—a nearly two-year low and a steep decline from 15% in December—the trade is far less appealing.

Ether futures are following the same trend, with their basis dropping to around 5%. Consequently, U.S. spot ether ETFs recorded $50 million in net outflows on Tuesday, reflecting broader caution in the crypto investment space.