Hedge funds unwind BTC basis trades as spot ETF flows may better reflect outright demand

Hedge funds have largely unwound Bitcoin basis trades, reducing leveraged funds’ net short position on the Chicago Mercantile Exchange to 12,955 BTC as of Nov. 3, according to Unfolded. Unfolded added that hedged spot-futures arbitrage demand, which had inflated the scale of spot ETF inflows, has now been mostly absorbed. As a result, future ETF flows are more likely to reflect pure directional investment demand. With the structural buying pressure that had cushioned down markets now reduced, spot ETF inflows are being tested as a gauge of genuine buying demand.