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Spot Bitcoin ETFs May Offer Stability Amidst Unsustainable Funding Rates

The ongoing rally is challenging market expectations regarding the impact of spot Bitcoin ETF inflows, which were speculated to propel the leading asset to break all-time highs by the end of March.

With Bitcoin exceeding $59,000 on Wednesday, marking a gain of over 5%, indications suggest that a new peak may materialize sooner than anticipated.

Funding Rate Fears vs. Spot ETF Strength

The rally is primarily driven by demand, evidenced by spot ETF volumes surpassing $3.2 billion and net inflows totaling $520 million. The rapid price increase has triggered short liquidations and sparked a speculative buying frenzy, causing funding rates to soar on native exchanges and even longer-end futures trading up to more than 16% over the spot.

According to QCP Capital’s latest analysis, the initial response from the options market was unexpectedly subdued. Traders…

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