The net inflows into spot Bitcoin ETFs launched in January 2024 reached approximately $39 billion. However, according to a report by 10x Research, a significant portion of these inflows stem from short-term trading strategies and arbitrage opportunities. Nevertheless, only a small fraction of investors view Bitcoin as a long-term investment.

The net inflows into spot Bitcoin ETFs launched in January 2024 reached approximately $39 billion. However, according to 10x Research’s report, a large part of these inflows are derived from short-term trading strategies and arbitrage opportunities. Markus Thielen, Research Director at 10x Research, noted that only $17.5 billion, or 44%, constitutes real long-term investments. Arbitrage strategies, particularly trading methods known as “carry trade,” make up 56% of the inflows. This strategy involves investors buying spot Bitcoins while simultaneously opening short positions in Bitcoin futures to take advantage of price differences between the two markets. Thielen stated that this situation indicates real demand for Bitcoin is much lower than suggested in media reports.

Thielen mentioned that only long-term Bitcoin purchases have increased after the U.S. presidential elections, indicating a change in purchasing behavior. Despite the rise in long-term purchases, the decline in retail trading volumes is said to have crippled funding rates and led to an ETF outflow wave. Following the resignation of SEC Chairman Gary Gensler, asset management firm 21Shares applied for a Polkadot ETF, reflecting a critical period for the future of crypto ETFs. On the other hand, Tuttle Capital Management applied for crypto-based leveraged ETFs, including funds linked to popular meme coins. Analysts suggest that these applications are part of a strategy to test the boundaries of crypto-friendly regulators at the SEC during the Trump era.