Billions of dollars have flowed into the U.S.-listed spot bitcoin BTC exchange-traded funds (ETFs) in recent weeks, as the cryptocurrency chalked out a sharp recovery rally from $75,000 to $100,000.

Most of the investment is likely driven by bold, strategic bullish directional bets rather than market-neutral arbitrage plays, data analysis suggests.

The 11 spot ETFs drew in $2.97 billion in investor money in April, with an additional $2.64 billion flowing in so far this month, according to data source SoSoValue. That has boosted the net inflow since inception in January 2024 to over $41 billion.

Institutions have historically used these ETFs to set up non-directional arbitrage plays to profit from price discrepancies between futures and spot bitcoin markets. The so-called cash and carry arbitrage involves buying ETFs while simultaneously selling the CME futures to pocket the futures premium while bypassing price direction risks.

But inflows since early April seem driven by bullish directional bets, not arbitrage plays. That’s reflected in the Commitment of Traders (COT) report published by the Commodities Futures Trading Commission (CFTC) every week.

The data shows leveraged funds, typically hedge funds and various types of money managers, including registered commodity trading advisors, have trimmed their net shorts to 14,139 contracts from 17,141 contracts in early April, according to data tracked by Tradingster.

The number of shorts would have risen if carry trades had primarily driven the net inflows.

“CFTC data shows leveraged funds didn’t significantly increase short positions, indicating most flows were directional bets, not arbitrage,” Imran Lakha, founder of Options Insight, in a blog post published on Deribit.

The shift in the nature of inflows in the ETFs suggests large players are increasingly using the ETFs to express a clear market outlook on bitcoin’s future direction.

Bitcoin last changed hands at $102,700 at press time, according to CoinDesk data.