Crypto News Today- Bitcoin ETFs Hit All-Time Highs, But Prices Don’t Move: Here’s Why

Crypto News Today- Bitcoin ETFs Are Setting Records, So Why Aren’t Prices Rising?

Crypto News– Spot Bitcoin exchange-traded funds are attracting a massive influx of funds at an unprecedented rate. However, Bitcoin’s price remains stable. For nearly a month, the leading cryptocurrency has been trading within a narrow range of $67,000 to $72,000.

Crypto market maker Wintermute provided some insight in its latest report. According to the firm, the issue lies in the behavior of hedge funds. While these funds are buying ETF shares, they are likely selling Bitcoin elsewhere, which is keeping the overall price movement minimal.

$100 billion worth of assets

Bitcoin ETFs have seen inflows for 19 consecutive days as of yesterday, setting a new record. Last week alone, Bitcoin investment vehicles accumulated nearly $2 billion globally, pushing crypto assets under management to the $100 billion mark for the first time since March.

Despite this influx, Bitcoin remains trading at $69,000, the same price it was in mid-May. CME, the largest platform for Bitcoin derivatives by volume, offers some insight into why. According to Wintermute, hedge funds have taken up an unprecedented $7.5 billion in short positions, which is contributing to the stagnation in Bitcoin’s price.

Not inherently pessimistic

It’s not necessarily because they’re bearish Bitcoin.

By combining short positions with a potential Bitcoin ETF exposure, hedge funds can profit from inefficiencies in the crypto market, Wintermute said.

These funds are likely targeting the discrepancies between Bitcoin’s spot price in ETFs and its futures on the CME exchange.

This strategy is deemed to be market neutral, which means the firms aren’t making a directional bet on the price of Bitcoin — they’re simply arbitraging the asset on different venues.

Diverse hedge fund tactics

Hedge fund Millennium Management, overseeing approximately $60 billion in assets, likely implemented such a tactic alongside other industry peers when it acquired over $2 billion worth of Bitcoin ETFs in May. Essentially, these inflows are deliberately offset on other platforms by the same institutions that procured the ETF shares.

The consequences of recent shifts in market structure are becoming apparent, especially with the subdued price movements despite substantial ETF inflows, stated Wintermute. Market conditions continue to remain within a confined range.

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