U$ETH
.S.-listed spot Bitcoin ETFs continue to attract robust capital inflows, reinforcing the growing institutional appetite for direct crypto exposure. According to data from SoSoValue, the 11 spot Bitcoin ETFs collectively pulled in $2.97 billion in April, followed by an additional $2.64 billion so far in May. This pushes the cumulative net inflow since their launch in January 2024 to over $41 billion.
Historically, institutional traders have used these ETFs to implement non-directional arbitrage strategies, particularly the well-known cash and carry trade. This method involves purchasing spot ETF shares while simultaneously shorting CME Bitcoin futures, allowing investors to capture the futures premium without taking a directional stance on Bitcoin's price.
However, recent inflow patterns suggest a pivot in strategy. Rather than arbitrage, a growing portion of the capital seems driven by outright bullish bets on Bitcoin’s price trajectory.
The weekly Commitment of Traders (COT) report from the Commodity Futures Trading Commission (CFTC) lends weight to this shift. Data tracked by Tradingster reveals that leveraged funds — a category encompassing hedge funds and commodity trading advisors — have cut their net short positions from 17,141 contracts in early April to 14,139 contracts as of the latest report.
A rise in short interest would typically accompany increased carry trade activity. Instead, the reduction suggests that fewer players are hedging ETF purchases with futures shorts — a clear sign that directional bets are dominating flows.
“CFTC data shows leveraged funds didn't significantly increase short positions, indicating most flows were directional bets, not arbitrage,” said Imran Lakha, founder of Options Insight, in a recent blog post on Deribit.
This marked shift highlights the evolving role of spot ETFs in institutional portfolios — from arbitrage instruments to vehicles for expressing conviction in Bitcoin’s long-term potential. With growing regulatory clarity and increasing investor confidence, ETFs are becoming a key gateway for sophisticated capital to take directional exposure to crypto markets.
