According to a report by Cointelegraph, Raoul Pal, CEO of macro research firm Real Vision, believes that about two-thirds of the 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 the US Bitcoin ETF 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 approximately $10.26 billion worth of Bitcoin spot ETF shares, which accounts for about two-thirds of the $15.42 billion net inflows since the launch of the Bitcoin spot ETF on January 11, according to data from Farside Investors. Millennium Management, an international hedge fund, 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 BlackRock’s iShares Bitcoin Trust Fund (IBIT). Millennium Management also holds shares of funds issued in collaboration with Fidelity, Grayscale, Bitwise, ARK Invest, and 21Shares. However, others have questioned Pal’s claims, pointing out that excluding Grayscale Bitcoin Trust Fund (GBTC), the assets under management of the 10 Bitcoin ETFs in the US 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 activity of these companies’ funds is arbitrage trading, as this is “the main thing that these listed major hedge funds do, they are not really directional risk takers,” meaning traders who make decisions based on the expected direction of the Bitcoin price. Arbitrage trading involves seizing short-term opportunities by identifying the difference between the net asset value (NAV) of a Bitcoin spot ETF and the price of Bitcoin (underlying asset). Carlos Zendejas, CEO of Deep Q Digital, added:
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