The recent slowdown in Bitcoin ETF selling isn’t driven by Trump’s crypto reserve plan but rather by changing market conditions.
Spot Bitcoin ETFs have faced record outflows since launching in January 2024. However, selling pressure appears to be easing, not because of Trump’s crypto reserve statement, but due to hedge funds unwinding basis trades, according to Matrixport analysts.
Hedge Funds Behind Bitcoin ETF Sell-Off
Analysts at Matrixport believe hedge funds triggered the Bitcoin ETF sell-off by unwinding basis trades. This aligns with an $8 billion drop in CME open interest since the December 2024 FOMC meeting, representing over 20% of total ETF inflows.
In a post on March 3, Matrixport analysts stated:
While it’s unclear how long this pause in selling will last, the broader crypto market reacted positively following Trump’s reaffirmation of his commitment to making the U.S. the Crypto Capital of the World.
Crypto Market Reacts to Trump’s Crypto Reserve Plan
Trump’s new executive order directs officials to establish a national crypto reserve including Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA).
Following the announcement:
✔ Bitcoin surged 8%, breaking $93,000
✔ Ethereum jumped 11%
✔ Cardano led gains, soaring 66%
✔ Solana climbed 20%
✔ XRP gained 28%
Despite the rally, the Crypto Fear & Greed Index remains in “Fear” territory at 33, signaling that investor sentiment is still cautious.
Final Thoughts
The slowdown in Bitcoin ETF selling suggests that market forces, not just political developments, are shaping crypto trends. If hedge funds reevaluate arbitrage spreads, ETF selling could ease further. Meanwhile, Trump’s crypto reserve plan continues to stir market excitement.
Will Bitcoin sustain its rally? Drop your thoughts in the comments!
