Hedge funds are increasing their exposure to U.S. spot bitcoin ETFs till 3Q Sep.
Posted: Nov 17, 2024
- Hedge funds like Millennium Management, Capula Management, and Tudor Investment increased exposure to U.S. spot bitcoin exchange-traded funds in Q3
- This was driven by an election-driven arbitrage trade
- Some funds took advantage of price differences between spot bitcoin and derivatives in the futures market
- They engaged in a bitcoin basis trade, buying spot bitcoin or ETFs and shorting cryptocurrency futures
- These hedge funds included Millennium, which more than doubled its shares in iShares Bitcoin Trust to 23.5 million shares worth $849 million
- Capula and Tudor also increased their exposure to bitcoin funds
- Overall, these hedge funds could see big gains if they kept their positions through Q4, as spot bitcoin ETFs have risen roughly 40%
- Many hedge funds prefer neutral trades with bitcoin due to its volatile price
- David Duong from Coinbase noted an increase in the bitcoin basis trade before the election, with clients requesting increases in credit lines
- Reuters could not determine if specific hedge funds were engaging in arbitrage bets, only that they had taken long positions.
What do people on Reddit think?
🚨 Reddit sentiment: mixed/positive - Context suggests positive sentiment towards bitcoin ETFs and potential future value, but some users are contemplating selling soon, indicating mixed views. Summarized comments: - Hedge funds increasing exposure indicates potential validation and legitimacy of bitcoin ETFs - There's a positive historical context to bitcoin's evolution with the mention of Satoshi - Timing discussion on selling and taking profits could suggest anticipation of a price increase
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