Institutional Cash-and-Carry Boosts US BTC ETFs, Glassnode

Glassnode analysts have identified that institutional cash-and-carry arbitrage strategies influence the demand dynamics for spot Bitcoin exchange-traded funds (ETFs) in the United States. This trading involves buying Bitcoin in the spot market while simultaneously selling futures contracts, thereby balancing the immediate price impacts on Bitcoin.

Market implications of cash-and-carry

According to Glass knottraders adopt this strategy to stabilize the spot price and contribute to the growing interest and use of Bitcoin ETFs as a vehicle for exposure to the spot market.

The analysts added: “As for the CME Group futures market, open interest has stabilized above $8 billion, after reaching a new record high of $11.5 billion in March 2024. This could indicate that a growing number of traders in traditional markets are adopting a cash flow strategy. and-carry arbitrage strategy.

Improved market liquidity and efficiency

Additionally, this methodical approach to trading provides ETFs with constant inflow, improving liquidity and enabling more efficient market operations. Alistair Byas-Perry of 21Shares points out that these transactions are particularly attractive due to the often positive price difference between Bitcoin’s spot and future prices.

Additionally, the significant on-screen liquidity in US markets makes these ETFs more attractive to hedge funds and institutional investors than their European counterparts.

This strategic engagement reflects a broader trend where sophisticated trading mechanisms are leveraged to optimize investment outcomes and market performance in the rapidly evolving digital asset space.

Read also: Grayscale’s GBTC Bitcoin ETF Sees Outflows of $121 Million on June 11

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