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Bitcoin ETFs See $667.4 Million Inflows as Institutional Interest Resurges

Coin WorldTuesday, May 20, 2025 4:13 am ET

1min read

U.S.-listed spot bitcoin exchange-traded funds (ETFs) experienced a significant influx of capital, with net inflows reaching $667.4 million on May 19. This marked the largest single-day total since May 2, indicating a resurgence in institutional interest. Nearly half of these inflows, amounting to $306 million, were directed into iShares Bitcoin Trust (IBIT), which now stands at $45.9 billion in net inflows.

The renewed demand for bitcoin ETFs follows a period of strong price performance for the cryptocurrency, which has traded above $100,000 for 11 consecutive days. This price surge has helped restore market confidence and attract more investors to the asset class. Additionally, the annualized basis trade, a strategy where investors go long on the spot ETF and simultaneously short bitcoin futures contracts, has become increasingly attractive. Yields from this strategy are approaching 9%, nearly double what was seen in April.

This shift has sparked a modest uptick in basis trade activity, as evidenced by an increase in trading activity in the CME futures market. On Monday, CME futures volumes hit $8.4 billion, the highest since April 23. Meanwhile, open interest stood at 158,000 BTC, up over 30,000 BTC contracts from April’s lows. This further underscores the growing appetite for leveraged and arbitrage strategies. However, both futures volume and open interest remain well below the levels seen during bitcoin’s all-time high of $109,000 in January, indicating there’s still significant headroom for further growth.

The upswing in the basis suggests that growth may already be happening, bringing back players that left the market early this year when the basis dropped to under 5%. Recent 13F filings revealed that the Wisconsin State Pension Board exited its ETF position in Q1, likely in response to a then-less favorable basis trade environment. However, given that 13F data lags by a quarter and the basis spread has since widened from 5% to nearly 10%, it is plausible that they have re-entered the market in Q2 to capitalize on the improved arbitrage opportunity.

This surge in Bitcoin ETF inflows is a clear indication that the cryptocurrency market is gaining momentum, and investors are increasingly looking to capitalize on the potential gains. As the basis trade nears 9%, it is likely that more investors will be drawn to the market, further fueling the demand for Bitcoin ETFs. The renewed demand for Bitcoin ETFs is a positive development for the cryptocurrency market, as it indicates that investors are becoming more confident in the asset. However, it is important to remember that the market is still volatile, and investors should be prepared for potential price fluctuations.

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