ANALYSIS: Weak US Bitcoin ETF Inflows Largely Driven by Fewer Arbitrage Opportunities

Foresight News reports that U.S. spot bitcoin ETF inflows have stalled in 2025, failing to continue the strong growth momentum seen in 2024, according to CoinDesk. Net outflows have reached $180 million over the past 30 days, one of the highest withdrawal rates since the ETF went public.

The weakness in inflows was largely driven by a weaker Bitcoin price and fewer arbitrage opportunities. Bitcoin prices have been volatile this year, hitting a new high of $109,000 in January on expectations that the Trump administration might pursue more crypto-friendly policies, but falling to $76,000 in early March on uncertainty over tariff policies. Increased market volatility has led retail investors to sell, while institutional investors are closing out cash-and-carry trades, a strategy that involves going long an ETF while shorting CME bitcoin futures.

Currently, the yield on this carry trade has fallen to around 2%, one of the lowest levels since the launch of the ETF, while lower-risk assets such as U.S. Treasuries offer higher yields, leading to an outflow of funds from the bitcoin market. Historical data shows that when ETF outflows intensify, it tends to signal that the price of bitcoin is nearing a stage bottom, as was the case during the April and August 2024 pullbacks, for example.