13 Sep 2022

Positive flows to BTC ETFs after a month of downside focus

ETF traders are unwinding short exposure in BTC ETFs, eyeing potential upside, leading CME basis to recover.
Source: ProShares, Tradingview (Coinbase)
Thursday and Friday last week showed promising signs in ETFs after a month of near-constant net negative flows to ProShares BTC ETFs.In the last three trading days, BITO has experienced consecutive inflows, equivalent to a growth in BTC exposure of 1650 BTC. Meanwhile, BITI, the short ETF, saw substantial outflows, amounting to 1,060 BTC on Friday. This is the largest BTC equivalent outflow from BITI since launch, and it suggests reduced conviction from traders betting on a further downfall. Outflows continued on Monday, as BITI experienced outflows equivalent to 425 BTC. Following these outflows, BITI’s short exposure has declined to an equivalent of 3,850 BTC. This is on par with the peak short exposure reached in June and July, implying that there still is a solid demand for betting on BTC downside. The Friday outflow of 1,060 BTC from BITI and inflow of 700 BTC to BITO combined contributed to a net positive directional impact equivalent to 1,760 BTC in the ProShares ETFs. This makes the Friday flows the strongest day in terms of ProShares’ flows since October 21st, 2021. These flows have likely contributed to sending CME’s futures back into contagion. While the daily flows on Friday in isolation suggest a growing bullish sentiment in ETFs, it’s worth noting that BITI’s BTC equivalent exposure sits on par with June and July highs, while BITO’s BTC exposure has declined to a three-month low.
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