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



Stay ahead of the market with AI stock alerts & AI summaries of the latest earnings, stock ideas for free with Fluid Bot. Sign up now!