Bitcoin ETF Inflows Climb as Basis Trade Approaches 9%, Boosting Institutional Demand

Investor enthusiasm for bitcoin ETFs surged on May 19 as bitcoin sustained levels above $100,000 and basis trade returns neared 9%, drawing renewed interest from institutional players.

Spot bitcoin ETFs listed in the U.S. reported net inflows totaling $667.4 million—the highest single-day figure since early May. Nearly half of these inflows, $306 million, flowed into the iShares Bitcoin Trust (IBIT), which now boasts $45.9 billion in cumulative net inflows, per Farside Investors.

This surge in demand corresponds with bitcoin’s robust price stability, holding above $100,000 for 11 days straight, which has helped restore confidence among large investors.

The basis trade—buying spot ETFs while shorting bitcoin futures on CME—has gained traction as annualized yields approach 9%, nearly doubling since April. This increase has encouraged a rise in basis trade volumes.

Monday’s CME futures saw volumes hit $8.4 billion (approximately 80,000 BTC), the highest since late April, while open interest climbed to 158,000 BTC, up 30,000 contracts from prior lows. This signals growing appetite for arbitrage and leveraged strategies.

Still, futures activity remains below January’s peak levels when bitcoin reached $109,000, suggesting potential for further market growth.

The higher basis spreads have likely brought back investors who left earlier this year during weaker conditions. For instance, 13F filings revealed that the Wisconsin State Pension Board sold off its ETF holdings in Q1 amid less attractive basis trades. Given the typical reporting delay and the widening basis spread to nearly 10%, it is plausible that the pension fund has reentered the market in Q2 to exploit the favorable arbitrage environment.