Institutional Demand for Crypto ETFs Remains Unclear Amid $4.1 Billion Inflows
Crypto investment products have seen significant inflows in September, with over $4.1 billion flowing into US-based funds.
The largest share of these inflows went to BlackRock's iShares Bitcoin Trust ETF (IBIT), which accounted for more than 53% of the total.
CoinShares head of research James Butterfill notes that it is difficult to determine how much of this demand comes from institutional investors, as buying and selling patterns in exchange-traded funds can be driven by both arbitrage strategies and bets on rising prices.
However, Butterfill suggests that some institutional investors may be using IBIT for the Bitcoin basis trade, which involves buying shares of a spot Bitcoin ETF while shorting Bitcoin futures to profit from the difference between spot and futures prices as they converge.