BlackRock continues to dominate the market of Bitcoin ETFs. Its iShares Bitcoin Trust (IBIT) recorded net inflows of $970.9 million on Monday, making it the second best day since its launch in January 2024. In contrast, its competitors are experiencing further outflows.
BlackRock’s Bitcoin ETF Achieves Its Second Best Day
With Bitcoin showing a weekly increase of 7.2% and trading around $95,000, BlackRock is capturing most of the institutional interest. Fidelity lost $86.9 million (FBTC), Bitwise lost $21.1 million (BITB), and ARK plummeted by $226.3 million (ARKB) out of the total $591.2 million invested on Monday. The gap is widening, and IBIT now seems to be crushing the Spot ETF market.
Since April 22, IBIT has accumulated over $4.5 billion in net flows. A performance that disproves the skeptics of the early days. Nate Geraci, President of The ETF Store, jests, “I still remember when they said there was no demand for a Bitcoin ETF…“
Eric Balchunas, Senior ETF Analyst at Bloomberg, sums up the situation, “ETFs take two steps forward after taking one step back. Exactly what we anticipated.“
In the Derivatives Markets, Leverage Retreats… to Make a Comeback?
On the derivatives side, the trend is different. Open interest on CME’s Bitcoin futures contracts has fallen four days in a row, reaching 132,750 BTC. This decline indicates a temporary disengagement of leverage, often synonymous with reduced volatility.
However, this dynamic could quickly reverse: the annualized basis (the difference between the spot price and the future price) increased from 5% to 9% in April. A return to attractive returns for traders practicing basis trades, the strategy of buying spot and shorting futures to capitalize on the spread.
In other words, if returns remain high, arbitrage opportunities will return, along with a likely increase in open interest in the short term.
