According to BlockBeats, on February 28th, Matrixport released a daily analysis report stating that the Bitcoin ETF has achieved tremendous success, attracting $39 billion in inflows within fourteen months. However, as Wall Street fully embraced Bitcoin, it was increasingly influenced by global liquidity, macroeconomic conditions, central bank policies, and institutional capital flows.
The strengthening of the US dollar has led to a decline in this liquidity indicator, indicating that the price of Bitcoin may be under downward pressure. Global liquidity reached its peak at the end of December 2024, and the significant strengthening of the US dollar provided a clear explanation for the continued pullback of Bitcoin. Looking ahead, the forward-looking nature of this time series suggests that once this correction ends (which may continue until March or April), Bitcoin may attempt to rebound to its previous highs. Analyzing macroeconomic trends and central bank policies gives us a clear advantage in predicting Bitcoin price trends. Especially as Wall Street investors begin to pay daily attention to these macro factors and actively participate in Bitcoin trading, this analysis has become particularly important.
Wall Street investors entering the Bitcoin market are divided into two categories. One type is wealth and asset managers who view Bitcoin as digital gold and long-term investments. These investors are likely to represent the wallet group holding 100-1000 bitcoins, who have become the largest bitcoin holders, surpassing the once dominant whale wallet.
The second type of Wall Street investors entering the Bitcoin market are hedge funds, who focus on non directional returns through arbitrage strategies rather than betting on long-term price increases in Bitcoin. When cryptocurrency traders are bullish, they typically use futures positions to push up funding rates. This provides arbitrage opportunities for hedge funds, who buy Bitcoin spot or Bitcoin ETF while short selling Bitcoin futures, thereby earning profits through fund rate differentials. These hedge funds hold a total of $10 billion in Bitcoin ETFs, and the total inflow of funds has reached $39 billion, indicating that at least 25% of Bitcoin ETF funds are related to arbitrage trading. According to calculations, 55% or more of ETF fund inflows may come from hedge funds focused on arbitrage, rather than investors who truly believe in Bitcoin's long-term upward potential.
Since the FOMC meeting in December, there has been a significant decline in yield opportunities, followed by a decrease in trading volume, so it is not surprising that hedge funds have begun to unwind their arbitrage positions. This trend is reflected in the record breaking outflow of funds from Bitcoin ETFs, which have exited trades that are no longer profitable.
