Bitcoin (BTC) price plunges to three-month lows below $80,00, dragging the broader market down

Tuesday was a rough day for the crypto market, as bitcoin (BTC) fell to three-month lows below $87000, dragging the broader market down.

U.S.-listed exchange-traded funds (ETFs) tracking bitcoin (BTC) and ether (ETH) saw a record-breaking level of outflows on Tuesday, as the crypto market fell and the premium in CME-listed bitcoin futures weakened.

The 11 spot ETFs registered a cumulative net outflow of $937.78 million, the most significant single-day redemption since the funds began trading in January 2024, according to data tracked by SoSoValue.

Among the ETFs, Fidelity's FBTC saw the most outflow, with investors pulling out $344.65 million from the fund. BlackRock's IBIT saw the second-most outflows, with investors pulling out $164.37 million from the fund, while the remaining funds saw outflows of less than $100 million each.

The weakening appetite for these ETFs can be attributed to the decline in the premium in the CME-listed bitcoin futures, which has dampened the appeal of the cash and carry arbitrage.

At press time, these BTC and ETH carry trades now offer barely more than the U.S. 10-year Treasury note, which offered a yield of 4.32%.

The strategy, heavily favored by institutions since early last year, involves buying the spot ETF and simultaneously selling the CME futures to pocket the premium while bypassing the price direction risks.

According to Velo Data, the annualized one-month basis (premium) in the CME bitcoin futures dropped to 4% on Tuesday, the lowest in nearly two years, and down significantly from almost 15% in December. In other words, the yield available on the cash and carry strategy has declined dramatically in two months.

The basis in ether futures has also declined sharply to around 5%. The spot ether ETFs listed in the U.S. witnessed a total outflow of $50 million on Tuesday.

Bitcoin fell as low as $86,000 on Tuesday, marking a three-month low for the world's largest cryptocurrency. The token has since rebounded slightly to trade above $87,000.

The post Bitcoin ETFs saw record outflows as crypto prices fell and futures premium dwindled appeared first on TechCrunch.

The post Bitcoin ETFs saw record outflows as crypto prices fell and futures premium dwindled appeared first on TechCrunch.

.