- Bitcoin spot ETFs experienced their largest single-day outflow of $937.78 million since their January launch.
- Fidelity’s FBTC led withdrawals with $344.65 million, followed by BlackRock‘s IBIT with $164.37 million.
- CME bitcoin futures premium dropped to 4%, its lowest level in nearly two years.
- The declining futures premium has reduced the profitability of cash and carry arbitrage strategies.
- Ethereum ETFs also faced pressure with $50 million in outflows as futures basis declined to 5%.
Spot bitcoin ETF products faced their most significant redemption day since their historic January launch, as cryptocurrency markets experienced broader selling pressure with Bitcoin dropping below $87,000.
According to data from SoSoValue, the 11 spot Bitcoin ETFs recorded a combined net outflow of $937.78 million on Tuesday. Fidelity’s FBTC emerged as the most impacted fund with $344.65 million in outflows, while BlackRock’s IBIT saw $164.37 million in redemptions.
The substantial outflows coincide with a significant decline in the CME bitcoin futures premium, which has fallen to 4% – its lowest point in almost two years. This represents a dramatic decrease from December’s peak of nearly 15%, severely impacting the profitability of cash and carry arbitrage strategies.
These arbitrage strategies, which involve simultaneously purchasing spot ETFs while selling CME futures to capture the premium spread, have been particularly popular among institutional investors. However, with current yields barely exceeding the U.S. 10-year Treasury note’s 4.32% return, the strategy’s attractiveness has diminished significantly.
The ethereum market hasn’t been spared either, with spot ETH ETFs experiencing $50 million in outflows. The basis in ethernet futures has similarly contracted to approximately 5%, reflecting broader pressure on cryptocurrency derivative markets.
This market dynamic represents a significant shift from the optimistic sentiment that surrounded the spot ETF launches in January, suggesting institutional investors may be reassessing their cryptocurrency exposure amid changing market conditions.
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