Basis Trade Nears 9%, Driving a Surge in Bitcoin ETF Inflows and Market Optimism

Bitcoin ETF Inflows Accelerate as Basis Trade Nears 9%, Sparking Institutional Interest

Investor confidence in bitcoin ETFs strengthened on May 19 as bitcoin maintained a price above $100,000 and the basis trade yield approached 9%, signaling a resurgence of institutional demand.

U.S.-listed spot bitcoin ETFs reported net inflows of $667.4 million—the largest single-day inflow since early May—with nearly $306 million directed to iShares Bitcoin Trust (IBIT), which now holds $45.9 billion in cumulative inflows, according to Farside Investors.

This inflow surge coincides with bitcoin’s steady price performance, holding above the $100K threshold for 11 days straight, reinforcing market confidence.

The basis trade strategy—going long on spot ETFs while shorting CME bitcoin futures—has grown increasingly attractive as its annualized yield approaches 9%, nearly twice the level seen in April. This has prompted a noticeable uptick in trading activity.

On Monday, CME bitcoin futures volume reached $8.4 billion, or about 80,000 BTC, the highest since late April. Open interest also rose, climbing to 158,000 BTC, an increase of more than 30,000 BTC contracts from April’s lows, underscoring rising demand for leveraged and arbitrage plays.

Despite this momentum, volumes and open interest remain below January’s peaks when bitcoin topped $109,000, indicating room for continued expansion.

The widening basis trade has likely enticed players who exited earlier this year during weaker spreads. For example, the Wisconsin State Pension Board sold off ETF positions in Q1, as revealed by 13F filings, but with the spread now near 10%, it’s plausible they have reengaged in Q2 to capitalize on the improved conditions.