Institutional Investors are Back in the Game with Bitcoin: Record Inflow!
On May 19, a record inflow of $667.4 million was recorded for spot Bitcoin (BTC) ETFs traded in the U.S., indicating a renewed interest from institutional investors in the market.
In recent weeks, as the price of Bitcoin has managed to stay above $100,000, investor confidence has significantly increased. This positive environment has also triggered interest in ETFs, resulting in the highest daily investment in recent weeks with a net inflow of $667.4 million on May 19. Approximately half of these fund inflows occurred in the iShares Bitcoin Trust (IBIT) product, bringing IBIT's total net assets to $45.9 billion.
In addition to this activity in ETFs, the basis trade, an arbitrage strategy employed by investors who buy spot Bitcoin ETFs while simultaneously taking short positions in Bitcoin futures on the CME exchange, has become attractive again. The arbitrage yield, which was around 5% in April, is now approaching 9%, rekindling investors' interest.
However, the fact that futures trading volume and open position amounts remain low compared to the peak period when Bitcoin reached $109,000 in January suggests that there is significant potential for growth in the market.
According to the recently released 13F reports, the Wisconsin State Retirement Fund had closed its Bitcoin ETF positions due to low arbitrage yields in the first quarter of the year. However, the recent increase in the arbitrage spread from about 5% to nearly 10% suggests that the fund may have returned to the ETF market in the second quarter. This could be an important indicator that institutional investors are beginning to take a renewed interest in the market.
