Why Huge Inflows But No Price Pump? š¤
You see headlines of record Bitcoin ETF inflows and skyrocketing spot volume. Yet, the price chart often shows sideways movement or minimal gains. This paradox has a key explanation: Cash and Carry Arbitrage.
šø In an uptrend, futures prices are typically higher than spot prices, reflecting bullish sentiment. This situation is known as Contango.
Major hedge funds exploit this by executing two simultaneous trades:
They buy 1 BTC on the spot market at a certain price.
Simultaneously, they short 1 BTC on the futures market at a higher price.
$LUNA , $USUAL .
