Freshly minted bitcoin exchange-traded funds (ETFs) are seeing exceptionally large trading volumes since last week’s landmark debuts from BlackRock Inc (NYSE:BLK), Grayscale, Fidelity and VanEck, among others.
Bloomberg data shows a total of $10 billion in trading volumes across 10 ETF products in the first three trading days, an “insane” volume, according to Bloomberg’s ETF seer Eric Balchunas.
He stated on social media: “Let me put into context how insane $10b in volume is in first 3 days. There were 500 ETFs launched in 2023. Today, they did a COMBINED $450m in volume. The best one did $45m. And many have had months to get going. $IBIT alone is seeing more activity than the entire '23 Freshman Class.”
IBIT is the ticker symbol for the BlackRock iShares Bitcoin Trust product.
Update on the #Bitcoin ETF Cointucky Derby. The ETFs have traded almost $10 billion total over 3 days. Will have updated flows and assets later tonight or tomorrow morning. pic.twitter.com/OnpCshjYJP— James Seyffart (@JSeyff) January 16, 2024
The bulk of trading volumes came from Grayscale’s Bitcoin Trust (GBTC), which is by far the largest of its kind with over $26 billion in bitcoin under management.
GBTC saw more than $5 billion in total trading volumes over three days. Yet it also saw total outflows of nearly $600 million, suggesting more sellers than buyers at the moment.
Grayscale’s GBTC fund has a management fee of 1.5%, which is significantly higher than any of its competitors. BlackRock’s IBIT fund, for instance, charges just 0.12%.
Traders may be shopping around for cheaper deals, causing an outflow of cash from GBTC.
Despite bitcoin’s strong debut in the ETF market overall, spot prices have failed to deliver.
The BTC/USD pair is down more than 7% week on week and was changing hands for $42,651 at the time of writing as bitcoin investors ‘sell the news’ after buying into the ETF hype for so long.
Bitcoin’s lacklustre week-on-week performance – Source: tradingview.com
Ethereum (ETH), the second-largest cryptocurrency, is in a comparatively stronger short-term position than bitcoin, having added over 8% against the US dollar in the past seven days.
At the time of writing, ETH/USD was swapping for $2,541.
In the broader altcoin space, Binance’s BNB token, Solanna (SOL), Ripple (XRP), Cardano (ADA) and Dogecoin (DOGE) have all added low single digits to their respective market capitalisations.
Global cryptocurrency market cap currently stands at $1.68 trillion, with bitcoin dominance lagging at the 51% mark.
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