Quantitative trading giants' speculative behavior sparks industry scrutiny: Bitcoin ETF capital inflows and spot prices are showing a "disconnect"

Recently, market rumors surrounding quantitative trading giant Jane Street unexpectedly revealed a overlooked discrepancy in the operation mechanism of Bitcoin ETFs: that is, the capital inflow into the ETF market has not directly translated into buying support for spot Bitcoin.

Previously, some opinions linked Bitcoin's price volatility directly to lawsuits faced by Jane Street, suggesting that the actions of a single institution have changed the market landscape.

However, several analysts pointed out that this attribution is superficial, ignoring the institutional "time lag" between ETF issuance and spot trading, with the core issue lying in the operational mode of authorized participants (the primary market makers of ETFs).

ProCap Chief Investment Officer Jeff Park explained that as authorized participants, large institutions rely on regulatory exemption mechanisms, allowing them to create or redeem ETF shares without immediately buying or selling spot Bitcoin on the open market.

This mechanism causes a misalignment in timing between ETF share creation, hedging activities, and spot trading, meaning that even if funds continue to flow into ETFs, it may not immediately convert into buy orders on exchanges.

Merkle Tree Capital Chief Investment Officer Ryan McMillin pointed out that because Bitcoin futures are often in a premium state, authorized participants prefer to use futures for hedging to earn basis gains rather than directly buying spot.

While this strategy is compliant, it creates a "firewall" between the spot market and ETF funds, preventing asset growth from effectively translating into spot buy support; and once futures positions are adjusted, the market can easily experience sharp volatility.

Although such operations are completely legal and align with the original design of ETFs, this clearly indicates that Bitcoin's pricing power is shifting from spot exchanges to futures and other institution-led domains.

McMillin also warned that without sufficient accountability, ETF "innovations" could easily become arbitrage tools on Wall Street, prioritizing institutional profits over providing solid support for the spot market.

Overall, this examination of the ETF mechanism touches on a core question: when institutions are deeply involved, who actually determines Bitcoin's price, and whom does it serve?

#比特币ETF #Market Mechanism