On January 16, the collective trading volume of 10 spot Bitcoin (BTC) ETFs exceeded $1.8 billion, surpassing more than three times the total volume of all 500 ETFs launched in 2023. Notably, Grayscale, BlackRock, and Fidelity contributed $1.6 billion to this total. In contrast, the combined trading volume for all 500 ETFs launched in the U.S. on the same day was only $450 million, according to Bloomberg ETF analyst Eric Balchunas.
Bitcoin ETFs surpassed 3X the daily volume of all 500 ETFs launched in 2023
BlackRock’s iShares Bitcoin Trust led in net inflows, attracting over $497 million in the past three days. Over the initial three days of trading, all new spot Bitcoin ETFs reached a total volume of nearly $10 billion, as reported by Bloomberg ETF analyst James Seyffart and Yahoo Finance data compiled by Cointelegraph.
Although Grayscale’s Bitcoin fund retained the highest overall trading volume, exceeding $5.1 billion, it experienced significant outflows as investors aimed to reduce exposure. The Grayscale Bitcoin Trust (GBTC) saw more than $579 million in outflows since its launch on January 11. Balchunas predicted that BlackRock’s product would likely continue to attract the most inflows, making it a strong contender to surpass GBTC as the “Liquidity King.“
Daily trading in Bitcoin ETFs was 3X higher than the combined volume of 500 ETFs launched in 2023
GBTC was once a lucrative option for investors who leveraged borrowed funds to join the fund, capitalizing on profits from Grayscale’s premium. The premium served as an indicator of Bitcoin demand in the era predating the availability of spot ETF products.
However, the fortunes of this arbitrage strategy quickly turned when the premium transformed into a discount, leading to substantial losses. Many investors found themselves trapped in the fund, reluctant to sell their Bitcoin at a significant discount.
Since GBTC successfully transitioned into a spot ETF, the discount has diminished, reaching as low as 1.55%. Investors, who had their Bitcoin tied up for prolonged periods, are now seizing the opportunity to exit the fund.
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