According to a report by Cointelegraph, Raoul Pal, the CEO of macro research firm Real Vision, believes that about two-thirds of net inflows into Bitcoin spot ETFs may come from arbitrage trading, and retail investors are not yet the “key driving factor” for such fund products.
Pal made this conclusion based on data shared by cryptocurrency analyst and MV Capital partner Tom Dunleavy, which shows that the “top 80 holders” of US Bitcoin ETFs are mostly hedge funds, with capital coming from various institutions and individual investors.
Pal wrote on X platform on Wednesday (12th):
Source:
Raoul Pal
These 80 companies collectively hold about $10.26 billion worth of Bitcoin spot ETF shares, according to data from Farside Investors, which accounts for about two-thirds of the $15.42 billion net inflow since the launch of Bitcoin spot ETFs on January 11.
International hedge fund Millennium Management holds $1.94 billion worth of Bitcoin ETF shares, making it the company with the most holdings of such fund shares. According to documents submitted to the US Securities and Exchange Commission (SEC), their largest allocation is to BlackRock’s iShares Bitcoin Trust Fund (IBIT), and Millennium Management also holds shares of Fidelity, Grayscale, Bitwise, ARK Invest, and 21Shares’ Bitcoin spot ETFs.
However, others have questioned Pal’s claims, pointing out that excluding Grayscale Bitcoin Trust Fund (GBTC), the total assets under management of 10 US Bitcoin ETFs and the short positions on the Chicago Mercantile Exchange (CME) total $42 billion. Cryptocurrency trader Joseph B stated:
Pal claims to know that the main flow of funds for these companies is for arbitrage trading because it is “the main thing that these listed hedge funds do, they are not real directional risk takers,” meaning traders who make decisions based on the expected direction of Bitcoin prices.
Arbitrage trading involves taking advantage of short-term opportunities by identifying the difference between the net asset value (NAV) of Bitcoin spot ETFs and the price of Bitcoin (underlying asset). CEO of Deep Q Digital, Carlos Zendejas, added: