With Nearly $1 Billion in Bitcoin Inflows, BlackRock’s IBIT Records Its Second-Biggest Surge Since Launch.

CME Bitcoin Futures Open Interest Declines for Four Days; BlackRock’s Bitcoin ETF Sees Record Inflows

CME Bitcoin Futures open interest has experienced a decline for the fourth consecutive day, according to data from the CME, pointing to a reduction in market leverage and futures market participation.

Meanwhile, BlackRock’s iShares Bitcoin (BTC) Trust ETF (IBIT) attracted $970.9 million in inflows, marking its second-largest net inflow since its January 2024 launch, based on Farside data. Of this, $591.2 million was added on Monday alone. This influx comes as several other Bitcoin ETFs saw significant outflows: Fidelity’s FBTC lost $86.9 million, Bitwise’s BITB saw a drop of $21.1 million, and ARK’s ARKB experienced $226.3 million in outflows.

The increase in IBIT inflows coincides with a 7.2% rise in Bitcoin over the past week, with the cryptocurrency now trading at $94,900. Since April 22, IBIT has pulled in over $4.5 billion in net inflows, defying broader market trends.

Industry experts are noticing the shift. Nate Geraci, President of The ETF Store, tweeted:
“Almost $1 billion into the iShares Bitcoin ETF today. Second-largest inflow since its launch in January 2024. It’s hard to believe there was once ‘no demand.’”

Eric Balchunas, Senior ETF Analyst at Bloomberg, observed:
“ETFs are in ‘two-steps-forward’ mode after a brief ‘step-back,’ exactly as we forecasted.”

Turning to the derivatives market, CME Bitcoin Futures open interest has dropped to 132,750 BTC, continuing a four-day losing streak. This suggests a slowdown in futures market activity, though a reversal could be on the horizon.

The basis yield has climbed from 5% to 9% in April, according to Velo data, signaling a potential uptick in futures market participation and a short-term rebound in open interest as traders look to profit from basis trades.

Why it matters:
In a basis trade, investors buy spot Bitcoin and short Bitcoin futures to profit from the price gap between the two markets. When the basis yield is high, demand for futures increases, pushing up open interest. Conversely, as the yield decreases, fewer traders engage in this strategy, resulting in a drop in open interest and signaling reduced market leverage.