VanEck Digital Asset Research Director: Bitcoin ETF's huge outflow of funds may be due to hedge funds unwinding basis trading strategies

Bitcoin ETF has seen outflows of around $2.1 billion over the past six consecutive days, marking the longest capital outflow period since June last year. VanEck's head of digital asset research, Matthew Sigel, believes the record outflows may be due to hedge funds unwinding a popular strategy called "basis trade", which profits from the price difference between the spot and futures markets. Some funds use ETFs to profit from cryptocurrency volatility or derivative positions, he explained: "This strategy involves buying Bitcoin spot (often through an ETF) while Bitcoin futures to lock in low-risk returns. However, the profitability of this trade has recently collapsed, significantly reducing its appeal. As a result, the hedge funds using ETFs for this trade may have closed their positions, leading to significant redemptions."