Bitcoin ETFs Thrive: Trading Volume Outshines 500 ETFs from 2023
Summary:
On January 16, the collective trading volume of 10 spot Bitcoin ETFs surpassed the total volume of 500 ETFs launched in 2023 by more than threefold. BlackRock's iShares Bitcoin Trust led in attracting net inflows, garnering over $497 million in three days. The Grayscale Bitcoin Trust (GBTC) experienced considerable outflows since its January 11 debut, but still leads in total trading volume. The shift from GBTC's former premium to a discount, which occurred in March 2021, has lessened to 1.55% since its conversion to a spot ETF.
On January 16th, the accumulated trading volume across 10 spot Bitcoin (BTC) exchange-traded funds (ETFs) exceeded by over three times the total trading volume of 500 ETFs unveiled in 2023. Data analyzed from Yahoo Finance by Cointelegraph illustrates that the recently authorized spot Bitcoin ETFs accumulated just beyond $1.8 billion in total trades on the same day. The ETFs provided by BlackRock, Grayscale, and Fidelity contributed to $1.6 billion of the total amount. In comparison, all 500 ETFs introduced in the U.S. in the previous year had a combined trading volume of just $450 million on January 16, as reported by Eric Balchunas from Bloomberg.
BlackRock's iShares Bitcoin Trust was the undisputed victor in absorbing net inflows, amassing over $497 million in the past three days. The aggregate trading volume for all new spot Bitcoin ETFs neared $10 billion within the initial three days of trading, according to data compiled by James Seyffart of Bloomberg and Yahoo Finance. Grayscale's Bitcoin trust maintained its leading position in total trading volume, surpassing $5.1 billion. However, the fund faced significant outflows as investors aimed to lower exposure. The Grayscale Bitcoin Trust (GBTC) saw an outflow of more than $579 million since it began trading on January 11th. Balchunas further explained that BlackRock’s product would continue to experience the highest inflows and is likely to supersede GBTC as the prime spot for liquidity.
GBTC was once a valuable asset for investors who borrowed finances to join the fund and derived profit from Grayscale's premium, typically used to assess Bitcoin demand before spot ETF products were accessible. This profitable arbitrage trade quickly turned into sizeable losses when the premium suddenly shifted into a discount, trapping several investors who were reluctant to sell their Bitcoin at a hefty discount. The GBTC premium dramatically dropped to a steep discount in March of 2021. Since GBTC's successful transformation into a spot ETF, the discount has lowered to 1.55%, enabling investors who had sustained their Bitcoin for lengthy periods to exit.
Published At
1/17/2024 8:48:50 AM
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