Fund money: ETFs and the Coinbase premium
Lesson 6 of 12 in the course “Analytics”. Free, with animations and a quiz.
How funds buy bitcoin
An ETF is an exchange-traded fund: its shares are bought on a stock exchange just like stocks. US spot bitcoin ETFs hold real BTC, and you can buy their shares through a regular brokerage account. When people buy shares, the fund buys more BTC: an inflow. When shares are redeemed, the fund sells BTC: an outflow. This shows whether money from traditional finance actually reached crypto.
Daily flows
The key ETF number is the daily net flow, inflow minus outflow. A green bar is a plus, a red bar a minus. Next to it, check the summary: last day, 5- and 30-day totals, best and worst day, streak of outflows in a row. The data is collected by CoinGlass, an exchange statistics service. One day is noise; the direction shows over 5 and 30 days.
Who exactly is buying
Below is the split by fund. IBIT, FBTC, ARKB, BITB and GBTC are tickers, the short exchange names of different ETFs. The key question: is the flow broad? If inflows go into almost every fund, demand is broad. If one fund is up and the rest are down, the picture is weaker than the total. Switch to ETH and compare: is money going into both assets or only bitcoin?
Example: adding up the day
Example from the picture, all in $M: IBIT +280, FBTC +95, ARKB +40, BITB −15, GBTC −70, others +20. Add it up: 280 + 95 + 40 − 15 − 70 + 20 = $350M. Four of the six rows are positive, with the biggest inflow into IBIT. So demand is fairly broad, even though money left two funds. If IBIT alone had made the whole plus, the same total would mean less.
The data delay
Funds do not publish their numbers at the same time. Trading happens on day T, some funds report the next morning, T+1, the rest later. So in the morning some of yesterday's cells are empty, and the day total will still change. An empty cell means "no data yet", not zero. Do not draw conclusions from an incomplete day: check the row date and wait until the big funds are filled in.
Example with numbers
Example: last day −$120M, the third outflow in a row. Sounds alarming. But 5 days are still +$280M, and 30 days are +$4,580M, about $4.6B. So it is a pause in inflows, not a reversal. It gets more worrying when outflows last a week, the 5- and 30-day sums turn negative, and the best days keep getting smaller.
The Coinbase premium
Coinbase is one of the biggest crypto exchanges for US buyers. The Coinbase premium is the gap between the BTC price there and on other exchanges, in percent. Positive: people in the US pay more, US demand is strong. Negative: Americans are selling or in no hurry to buy. A ready-made premium chart is calculated by, for example, CryptoQuant. And Arkham Intel, a service that labels wallets, shows big transfers by funds.
Example: working out the premium
Example from the picture: BTC costs $100,150 on Coinbase and $100,000 on other exchanges. The gap is $150. Divide by the price: 150 / 100,000 = 0.0015, which is +0.15%. The premium is positive, so US buyers are willing to pay more. One such day means little. It is stronger when the premium stays positive for several days and lines up with ETF inflows.
Common mistakes
The trap: drawing a conclusion from one day. Flows are noisy, so look at 5 and 30 days. Other mistakes: forgetting the delay and reading an incomplete yesterday as final. Looking only at the total without the split by fund. Treating inflows as a guaranteed rise: ETFs show demand, but leverage, macro and sellers move price too. Your move: compare ETF flows with the Coinbase premium.
Check yourself
- How do you read this?
Correct answer: One day is noise, the month is still an inflow. One day does not change the picture: $3,000M over the month far outweighs a single $200M minus. It gets worrying when outflows drag on for a week and the 5- and 30-day totals turn negative. - What do you do with yesterday's total?
Correct answer: Wait for the big funds to report. An empty cell means "no data yet", not zero. Some funds publish the next morning, others later, so the total will still change. Check the row's date and wait for the big funds. - What does it tell you?
Correct answer: US buyers are willing to pay more: their demand is stronger. A plus means people in the US pay more for BTC than elsewhere. When the premium holds for several days and lines up with ETF inflows, that is a strong sign of US demand. - Which conclusion is more honest?
Correct answer: Demand is narrow, the picture is weaker than the total. A broad inflow into many funds signals general demand. Here the plus rests on one fund while money leaves most of the others. The same total with inflows into five of six funds would mean much more.