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Bitcoin ETF trading hits peak levels since launch – What’s next?

TL;DR

  • Bloomberg Bitcoin exchange-traded funds (ETFs) analyst Eric Balchunas reports a particular uptick in volume for HODL and BTCW.
  • Spot Bitcoin exchange-traded funds have witnessed consistent inflows over the last week, outperforming any other exchange-traded product (ETP) among the 3,400 listed in the US.
  • The rise may be due to Presidents’ Day closing U.S. markets on Monday, after which weekend trades were resolved on Tuesday.

Bitcoin exchange-traded funds (ETFs) have recently experienced a significant surge in trading activity, marking their busiest session since their debut in January. This spike in trading volume underscores investors’ growing interest and adoption of Bitcoin ETFs.

The heightened trading activity reflects several factors driving investor sentiment and market dynamics within the crypto ecosystem. Notably, this surge comes on the heels of previous milestones, such as the impressive trading volumes witnessed during the initial days of the introduction of Bitcoin ETFs. 

Bitcoin ETF mania: Investors flood market in record-breaking numbers

Bitcoin (BTC) exchange-traded funds had the greatest activity since their launch in the United States last month. Bloomberg Intelligence senior ETF analyst Eric Balchunas observed on X that volume was around $2 billion, the biggest since the opening day of trading on January 11.

VanEck’s HODL ETF had just under $400 million in activity, WisdomTree Bitcoin Fund (BTCW) had $221.9 million in trades, and BitWise had $178.29 million. According to Balchunas, VanEck’s HODL “is going wild today with $258 million in volume already, a 14x jump over its daily average.”

“And it’s not one big investor (which would make sense) but rather 32,000 individual trades, which is 60x its average,” he went on to say.

It has been speculated that the explanation for the rise is that US markets were closed on Monday for Presidents’ Day, and trades made over the weekend were finalized on the first day after work resumed.

Gold ETFs have seen considerable withdrawals since the debut of ten spot bitcoin ETFs on January 11, with roughly $10 billion inflows into the two largest bitcoin ETFs. However, this does not necessarily indicate a direct shift of funds from gold to bitcoin.

Bitcoin’s market performance and the effect on ETFs

Spot Bitcoin exchange-traded funds (ETFs) have witnessed consistent inflows over the last week, outperforming any other exchange-traded product (ETP) among the 3,400 listed in the US.

Bitfinex analysts disclosed in a recent Bitfinex Alpha report that ETFs saw net positive inflows of more over $2.2 billion for the second week in a row between February 12 and 16. The inflows helped BTC rebound from its brief decline following the release of the Consumer Price Index (CPI) data.

The majority of the inflows were directed toward BlackRock’s IBIT ETF, which received $1.6 billion. The fund alone has received $5.2 billion year-to-date (YTD), accounting for over half of the asset manager’s total net inflows across all of its ETFs.

Fidelity’s FBTC had the second-highest volume last week, garnering $648.5 million. The fund was followed by Ark Invest/21Shares’ ARKB and Bitwise’s BITB, which raised $405 million and $232.1 million, respectively.

On the other hand, outflows from Grayscale’s GBTC have continued, with investors withdrawing $624 million in the last week. Bitfinex stated that the ETF’s capital depletion has surpassed $7 billion since the US Securities and Exchange Commission (SEC) approved its conversion from an over-the-counter commodity to an ETP in January.

The steady flows into spot Bitcoin ETFs come as BTC reaches a new year-to-date high of $52,900 for the first time since December 2021. Analysts reported that only 114 days in 2021 saw a daily closing price above the new threshold, accounting for 2.29% of BTC’s trading history.

At the time of writing, Bitcoin (BTC) is worth $51,966.33, down 0.2% from an hour ago and up 0.4% from yesterday. BTC’s value today is 4.9% greater than it was seven days ago.

The global crypto market cap is now $2.08 trillion, up 0.81% in the last 24 hours and 80.13% from a year ago. As of today, BTC’s market cap is $1.02 trillion, reflecting a 48.95% dominance. Meanwhile, stablecoins’ market cap is $140 billion, accounting for 6.71% of the total crypto market cap.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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