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Think BlackRock Is Bullish on Bitcoin? Arthur Hayes Says They’re Not, Here’s Why

Institutional inflows into spot Bitcoin ETFs have been one of many greatest storylines since their launch final 12 months. With Bitcoin hitting new highs in 2025 and ETF belongings surging, many assume massive Wall Street gamers are lastly “lengthy Bitcoin.”

But not so quick, says Arthur Hayes.

In an electronic mail despatched Monday, the BitMEX co-founder argues that a lot of the institutional exercise inside BlackRock’s IBIT, nonetheless the biggest Bitcoin ETF by belongings, has nothing to do with long-term conviction. Instead, he says, the largest gamers are operating a simple arbitrage commerce.

“They Are Not Long Bitcoin”

Hayes factors to the ETF’s largest holders, hedge funds and financial institution buying and selling desks, together with companies like Goldman Sachs, and argues they’re primarily engaged in what’s generally known as a foundation commerce.

Here’s the way it works:

  • Funds purchase IBIT ETF shares
  • Simultaneously brief CME Bitcoin futures
  • Capture the yield distinction between the ETF and futures (the premise)
  • Use the ETF shares as collateral for the futures brief

According to Hayes:

“They are usually not lengthy Bitcoin. They solely play in our sandbox for just a few additional factors over Fed Funds.”

This has change into much more widespread in 2025 as US charges have fallen, with the Federal Reserve chopping charges thrice this 12 months, decreasing yields throughout conventional markets and making arbitrage alternatives extra enticing.

Why ETF Inflows Can Be Misleading

When the premise is high sufficient, hedge funds rush into the commerce, creating the looks of enormous institutional inflows.
When the premise compresses, because it has a number of instances all through 2025, those self same establishments unwind the commerce, inflicting sharp ETF outflows.

Hayes says this dynamic creates a harmful phantasm, and it performs out like this:

When the premise spikes → ETF inflows surge → “Institutions are shopping for Bitcoin!”

When the premise collapses → ETF outflows spike → “Institutions are dumping Bitcoin!”

Retail buyers usually misread these flows, which might amplify market volatility.

What Changed in 2025

Earlier this 12 months, Bitcoin rose steadily at the same time as greenback liquidity tightened underneath the incoming Trump administration and US Treasury issuance surged. ETF inflows and shopping for from digital asset trusts helped offset the liquidity drag.

But Hayes argues that that section could also be over.

  • Several digital asset trusts (DATs) have traded under NAV this autumn.
  • The ETF foundation commerce has change into much less enticing as futures spreads narrowed.
  • Hedge funds have diminished their positions, triggering noticeable outflows throughout the ETF advanced for weeks at a time.

With these synthetic demand drivers fading, Hayes says Bitcoin lastly has to reply to the underlying macro atmosphere once more.

“Bitcoin Must Fall” — Hayes on Short-Term Pressure

According to Hayes:

“Bitcoin should fall to replicate the present short-term fear that greenback liquidity will contract or not develop as quick because the politicians promised.”

In different phrases:
ETF flows pushed Bitcoin up when liquidity didn’t justify it.
Now these flows are gone, and liquidity nonetheless issues. His message for late 2025 is blunt:

  • Most ETF inflows have been arbitrage, not long-term institutional perception.
  • BlackRock’s greatest ‘holders’ aren’t lengthy Bitcoin, they’re lengthy the premise.
  • The unwind of these trades is now affecting Bitcoin’s worth.

For retail buyers, the lesson is easy:
ETF flows let you know extra in regards to the futures curve than institutional conviction.

The submit Think BlackRock Is Bullish on Bitcoin? Arthur Hayes Says They’re Not, Here’s Why appeared first on BeInCrypto.

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