Van Straten Suggests Recent Bitcoin ETF Inflows Are Likely Directional Moves

Bitcoin ETFs See $3B Inflows as CME Futures Activity Slows, Signaling Shift in Market Behavior

The Bitcoin market is showing signs of changing investor strategies, with U.S.-listed spot ETFs drawing over $3 billion in net inflows since November 20, while CME futures open interest has significantly declined. This divergence suggests that investors may be using ETFs for directional exposure rather than traditional arbitrage methods.

Data from Farside Investors reveals robust daily inflows into Bitcoin ETFs, with the exception of November 25 and 26. On Tuesday, BlackRock’s IBIT ETF saw a notable $693.3 million inflow—the largest since November 20—bringing its total lifetime inflows to $32.8 billion. Meanwhile, CME futures open interest fell by nearly 30,000 BTC (approximately $3 billion) to 185,485 BTC, according to Glassnode.

Historically, ETF inflows and CME open interest have moved in tandem as institutions employed price-neutral cash-and-carry strategies. This approach involves holding a long position in ETFs and shorting CME futures to capture the futures premium while avoiding price risk. The recent divergence, however, hints that investors are increasingly buying ETFs as direct bullish bets on Bitcoin.

Carry Trade Still Attractive

Despite this shift, the carry trade remains a compelling strategy for some. CME’s three-month Bitcoin futures currently offer an annualized basis of 16%, a return significantly higher than the U.S. 10-year Treasury yield or Ethereum staking rewards.

Earlier this year, the cash-and-carry yield peaked above 20%, but even at current levels, it continues to provide a lucrative alternative for risk-averse investors. However, Bitcoin’s more than 100% price rally this year has made outright exposure to the asset more appealing, as evidenced by the surge in ETF inflows.

This trend highlights a shift in market behavior, with spot ETFs becoming an increasingly popular choice for investors seeking direct participation in Bitcoin’s upside, marking a potential evolution in the broader adoption of crypto-focused financial products.