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Bitcoin, achieved a 23% gain over five days ending on February 28, yet Bitcoin futures investors are reluctant to take a bullish stance. This hesitance is partly due to Bitcoin having experienced a weekly loss of 5% longer than five weeks ago, which led to an increased demand for downside protection.
Investor Psychology and Bitcoin
Concerns about a potential decline are emerging among investors due to heavy inflows into spot Bitcoin exchange-traded funds (ETFs), which could trigger a price correction. This situation indicates that these investors are either not convinced by the current bull run or do not feel the need to leverage against macroeconomic uncertainty.
On February 28 alone, US Bitcoin ETFs saw a net inflow of $673 million and have accumulated a total of $7.4 billion in net deposits since their launch on January 11. Bloomberg’s senior ETF analyst James Seyffart shared this information, highlighting that so far, only 150 ETF funds have crossed the $10 billion mark in assets under management. According to Nate Geraci, one of the founders of the ETF Institute, BlackRock’s iShares Bitcoin ETF fund already has over $9 billion in assets.
Investor beaniemaxi, expressed his views on platform X, noting that both BlackRock and other spot ETF issuers have incentives to deploy their sales teams because they are promoting the Bitcoin narrative. This suggests that there is a significant distance to cover before the inflows begin to decrease. The article also emphasizes Bitcoin’s halving trigger, indicating that ETF issuers have a compelling sales argument.
Noteworthy Data in the Futures Market
Despite the impressive 45% gain in February, examining Bitcoin futures markets is necessary to gauge the discomfort of professional investors with Bitcoin. The 25 delta skew serves as an informative indicator, revealing when arbitrage desks and market makers demand excessive fees for upward or downward protection.
Regardless of whether market makers offer discounted downward protection compared to upward risk, cross-checking data from Bitcoin futures markets is crucial to measure the stance of top investors. This indicator combines positions in spot, perpetual, and three-month futures contracts to provide a comprehensive view of how bullish or bearish these investors are.
The data shows that top investors on Binance and OKX remained relatively neutral until February 26, at which point they gradually increased their net long positions as Bitcoin’s price surpassed $53,000. This data partially contradicts Bitcoin skew data but can be linked to the abrupt cessation of bearish predictions due to the forced liquidation of short positions.
