Tuesday proved to be a challenging day for the cryptocurrency market, with bitcoin (BTC) sinking to three-month lows beneath $87,000, which negatively impacted the wider market. More crucially, investors withdrew assets from U.S.-listed spot bitcoin exchange-traded funds (ETFs) at an unprecedented scale.
The 11 spot ETFs experienced a combined net outflow of $937.78 million, marking the largest single-day redemption since the funds launched trading in January 2024, as reported by data from SoSoValue.
Fidelity’s FBTC faced the largest outflow, amounting to $344.65 million, followed by $164.37 million in redemptions from BlackRock’s IBIT. Other funds saw outflows of less than $100 million each.
The diminished interest in these ETFs may be linked to a drop in the premium of CME-listed bitcoin futures, which has reduced the attractiveness of cash and carry arbitrage strategies. Furthermore, these BTC and ETH carry trades now yield only slightly more than the U.S. 10-year Treasury note, which was at 4.32% at the time of reporting.
This strategy, which has been popular with institutional investors since early last year, involves purchasing the spot ETF while simultaneously selling CME futures to capture the premium and avoid directional price risks.
As per Velo Data, the annualized one-month basis (premium) in CME bitcoin futures fell to 4% on Tuesday, its lowest point in nearly two years, and down sharply from about 15% in December. This signifies a dramatic decline in the yield available from the cash and carry strategy over just two months.
The basis for ether futures also slid to around 5%. The U.S.-listed spot ether ETFs recorded total outflows of $50 million on Tuesday.
