Bitcoin and Ether ETFs See Record Withdrawals as Carry Trade Appeal Fades
Investors pulled significant capital from U.S.-listed spot bitcoin and ether ETFs on Tuesday as shrinking futures premiums in CME markets reduced the attractiveness of carry trades.
Bitcoin (BTC) tumbled to a three-month low, slipping below $87,000, leading to broader market losses. At the same time, spot bitcoin ETFs recorded their highest single-day net outflows, signaling waning investor confidence.
According to data from SoSoValue, the 11 U.S. spot ETFs saw combined net redemptions of $937.78 million—the largest daily outflow since their inception in January 2024. Fidelity’s FBTC led the exodus with $344.65 million in withdrawals, while BlackRock’s IBIT followed with $164.37 million. Other funds reported outflows below $100 million each.
The cooling demand for these ETFs is closely tied to the diminishing premium in CME-listed bitcoin futures, which has weakened the profitability of cash-and-carry arbitrage. Additionally, yields on BTC and ETH carry trades have now become less attractive compared to the U.S. 10-year Treasury note, which currently offers a 4.32% yield.
This strategy, widely adopted by institutions since early last year, involves buying spot ETFs while shorting CME futures to capture the premium—without exposure to directional price risks. However, with the annualized one-month basis in CME bitcoin futures plunging to 4%—its lowest level in nearly two years and down from nearly 15% in December—the strategy’s profitability has sharply declined.
Ether futures have seen a similar drop, with their basis shrinking to approximately 5%. As a result, U.S.-listed spot ether ETFs faced $50 million in total outflows on Tuesday, further reflecting investor hesitancy in the crypto ETF market.
