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Date: 2025-02-26 06:00:49
On Tuesday, the cryptocurrency market experienced a difficult day as bitcoin (BTC) dropped to its lowest point in three months, dipping below $87,000 and causing a broader market downturn. Most notably, investors withdrew funds from U.S.-listed spot bitcoin exchange-traded funds (ETF) at an unparalleled rate.
The 11 spot ETFs recorded a combined net outflow of $937.78 million, marking the largest single-day redemption since their inception in January 2024, based on data compiled by SoSoValue.
Fidelity's FBTC had the most significant outflow, amounting to $344.65 million, followed by $164.37 million in withdrawals from BlackRock's IBIT. The remaining funds each reported outflows of less than $100 million.
The waning enthusiasm for these ETFs may be linked to the decrease in the premium on CME-listed bitcoin futures, which has diminished the appeal of the cash and carry arbitrage. Additionally, these BTC and ETH carry trades now offer only slightly more than the U.S. 10-year Treasury note, which had a yield of 4.32% at the time of publication.
This strategy, which has been favored by institutions since early last year, involves purchasing the spot ETF while simultaneously selling the CME futures to earn the premium while avoiding the risks associated with price direction.
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According to Velo Data, the annualized one-month basis (premium) in the CME bitcoin futures fell to 4% on Tuesday, the lowest in nearly two years, and significantly down from almost 15% in December. In other words, the yield available on the cash and carry strategy has decreased significantly in just two months.
The basis in ether futures has also decreased significantly to around 5%. On Tuesday, the spot ether ETFs listed in the U.S. experienced a total outflow of $50 million.
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