Bitcoin ETFs See Record Outflows as Arbitrage Strategy Falters
U.S. Bitcoin ETFs faced an unprecedented outflow on February 25, with investors pulling nearly $940 million from these funds, the largest one-day withdrawal since their launch in January 2024.
This dramatic pullback follows a trend of over $2 billion in outflows during the past week, signaling a shift in market sentiment.
Fidelity’s FBTC led the retreat, losing $344.7 million, while BlackRock’s IBIT followed with $164.4 million in redemptions. Smaller withdrawals impacted other major funds like Bitwise’s BITB and Grayscale’s Mini Bitcoin Trust.
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The reason behind this sudden exodus lies in the collapse of a key trading strategy known as the “basis trade.” This tactic, commonly used by institutional investors, exploits the price disparity between Bitcoin’s spot price and futures contracts.
As the futures premium has diminished, many of these traders have been forced to unwind their positions, triggering the sharp outflows.
BitMEX co-founder Arthur Hayes and others suggest this is the main catalyst behind the ongoing sell-off in Bitcoin ETFs.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
