Is Bitcoin being manipulated? Experts explain the impact of ‘miniature’ ETF inflows

Published on:

US Bitcoin Exchange-Traded Funds (ETFs) are witnessing a historic streak of inflows, marking 17 consecutive days of net additions. On a particularly notable Tuesday, these ETFs saw inflows totaling a staggering $886.6 million, making them the second largest single-day inflow since their launch.

This was followed by another significant day of inflows yesterday, which totaled $488.1 million, with significant contributions from major financial players such as Fidelity ($220.6 million), Blackrock ($155.1 million) and Ark ($71.4 million ). Despite these significant capital injections, Bitcoin’s price has shown a relatively faint reaction, rising from $68,000 to $71,000 since the beginning of the week.

The subdued price movement amid ponderous ETF inflows has intrigued many market participants and analysts. Such inflows are typically expected to put stronger upward pressure on Bitcoin prices. However, the observed price dynamics suggest that other countervailing factors may be at play.

Why isn’t the price of Bitcoin rising?

Cryptocurrency trading analytical platform Kingfisher offered explanation via a post on X, suggesting that the carry trade strategy may have an impact on price dynamics. According to their analysis: “BTC ETF inflows didn’t impact price as much as you expected? This may be due to a carry trade being loaded. Short Futures + Buy Spot/ETF.”

Carry trading in this context involves shorting Bitcoin futures contracts while simultaneously purchasing Bitcoin spot shares or Bitcoin ETF shares. This strategy can hedge against potential price volatility and take advantage of the divergence between futures and spot prices.

JJ the Janitor (@JLabsJanitor) next developed on the mechanics of strategy. He made comparisons to the behavior visualized on the PANDA terminal charts, explaining: “When the big boys want BTC to get occupied in the spot market, they sell futures contracts to drive up the price to bids. When they are full and ready to call it quits, they close their shorts, hence the inverse correlation with True Open Interest (OI).”

His comments point to strategic market manipulation that, while legal, blurs the lines between shrewd investment tactics and potential ethical issues. His next tweet: “Market manipulation or well-thought-out investment strategy… what’s the difference?” challenges the narrative, questioning the ethical implications of such strategies.

The discussion prompted further analysis from the crypto community. User X, Sahra, criticized the practical implementation of the carry trade, noting: “Carry trading should naturally suppress funding rates. Long-term position pressure on the perpetual should theoretically cause perpetual bond interest rates to fall (assuming all other conditions remain constant) as perpetuals would begin to lag. Everything else makes sense, but these rates are far too low to justify a transfer IMO.”

This comment highlights the complexity of carry trades, where expected outcomes, such as reduced funding rates, are not consistent with market observations, suggesting that other forces may be influencing the market.

Kingfisher responded to Sahra’s skepticism by confirming this anomaly: “Correct, although funding remains quite positive. This suggests that while carry trading may occur, it is not the dominant force in the market. Other factors, such as bullish sentiment or other buying pressure, may offset expected downward pressure on funding rates from the carry trade.

At the time of publication, the price of BTC was $70,803.

Bitcoin price remains at $71,000, 1-day chart | Source: BTCUSD on

Featured image created with DALL·E, chart from


Leave a Reply

Please enter your comment!
Please enter your name here