Around two-thirds of the net inflows into spot Bitcoin ( BTC ) exchange-traded funds (ETFs) may be coming from arbitrage trading, claims Real Vision CEO Raoul Pal. 

“If this is correct, it shows the vast majority of the ETF flow are just arbitrageurs and retail is not the key driver yet,” Pal said in a June 11 X post , referring to data presented by crypto analyst and MV Capital partner Tom Dunleavy.

The data showed the “top 80 holders” of United States Bitcoin ETFs were hedge funds with capital coming from various institutional and individual investors.

Source: Raoul Pal

The 80 firms collectively hold around $10.26 billion worth of spot Bitcoin ETF shares, approximately two-thirds of the $15.42 billion in net inflows since spot Bitcoin ETFs launched on Jan. 11, according to Farside Investors data .

International hedge fund Millennium Management held $1.94 billion worth of Bitcoin ETF shares, the largest of any firm. On May 16, it spread its Bitcoin ETF holdings across multiple issuers, holding shares in Bitwise, Grayscale, Fidelity, BlackRock, and ARK and 21Shares’ ETFs.

However, others disputed Pal's claims pointing out that,excluding the Grayscale Bitcoin Trust (GBTC), the ten U.S. Bitcoin ETFs together have $42 billion in assets under management, plus short interest on the CME.

“The recent inflows could certainly be attributed to the basis trade, but as an overall number, the basis trade makes up less than 15% of overall ETF flows,” said crypto trader Joseph B.

Pal claimed he knew these firms’ flows are primarily arbitrage, as it’s “what the main hedge funds listed do mainly. They are not really directional risk takers” — traders who make decisions based on the anticipated direction of Bitcoin’s price. 

Related: Bitcoin ETFs worldwide in focus as BTC price passes $71K

Arbitrage trading involves spotting short-term opportunities by finding discrepancies between the net asset value (NAV) of the spot Bitcoin ETF and the price of Bitcoin, the underlying asset.

“When you read through this list the one thing that jumps off the page is that most of these guys are not “Buy and Hold” investors,” added Deep Q Digital CEO Carlos Zendejas.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.