Record Trading Volumes for Bitcoin ETFs
On March 5, Bitcoin reached an all-time high in USD and the new spot ETFs experienced record trading volumes.
The ten Bitcoin ETFs traded $10 billion on that day, surpassing the previous record set on Feb. 28.
According to Bloomberg ETF analyst Eric Balchunas, volatility and volume are closely associated with ETFs, so it is not surprising that these funds, which are less than two months old, achieved such high trading volumes.
ETFs with Record Trading Volume
- BlackRock’s IBIT, Fidelity’s FBTC, Bitwise’s BITB, and the Ark 21Shares ARKB fund all had record trading volume days.
- The Short Bitcoin Strategy ETF (BITI) from ProShares also had a record trading day due to its nature as a short Bitcoin ETF.
- The ProShares Bitcoin Strategy ETF (BITO) and the Volatility Shares 2x leveraged Bitcoin Strategy ETF (BITX) also broke their previous records.
Balchunas commented on the impact of spot markets and Bitcoin’s new high on derivatives markets, stating that it had a favorable effect on futures ETFs. He also noted that the ten spot Bitcoin ETFs have accumulated over $50 billion in assets under management within seven weeks of their launch. If they continue at this pace and add $10 billion per month, they could surpass gold ETFs by summer.
Leverage Flush After BTC Crash
Following its new all-time high, Bitcoin experienced a flash crash of 12%, although it has since recovered slightly and is trading around $66,000 at the time of writing.
Coinglass reported that over the past 24 hours, more than 312,000 traders, mostly longs, were liquidated, resulting in total liquidations of $1.15 billion.
Additionally, on March 4, both BlackRock and Fidelity saw significant inflows, with each accumulating over $400 million.
However, Grayscale experienced a large outflow of $332 million from its GBTC fund on the same day, according to preliminary data from Farside Investors.
Hot Take: ETFs Gain Momentum as Bitcoin Hits New High
The new spot Bitcoin ETFs have made a significant impact in the market, achieving record trading volumes and accumulating billions of dollars in assets under management within a short period of time. This success is not surprising considering the association between volatility and volume in ETFs. As Bitcoin reached a new all-time high, it also experienced a flash crash and subsequent recovery. The high liquidation numbers indicate the impact of this price movement on traders. Despite the crash, inflows into traditional investment firms like BlackRock and Fidelity remain strong. However, Grayscale faced significant outflows from its GBTC fund. Overall, the rise of Bitcoin ETFs and their performance in the market demonstrate the growing interest and demand for cryptocurrency investments.
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