Crypto Investors Favor Spot Bitcoin ETFs Over Futures-based ETFs
Spot bitcoin exchange-traded funds (ETFs) in the U.S. have gained significant traction, capturing almost 90% of the daily trading volume market share for ETFs offering price exposure to bitcoin. On the other hand, bitcoin futures ETFs introduced in 2021 hold a mere 10% share. This indicates that investors strongly prefer direct exposure to bitcoin through spot ETFs rather than products based on bitcoin futures contracts.
Spot Bitcoin ETFs Dominate Trading Volume Market Share
The Block’s Data Dashboard reveals that spot bitcoin ETFs have reached an all-time high percentage of the daily volume market share. These figures highlight the preference for spot bitcoin ETFs among investors.
Robust Trading Volume for Spot Bitcoin ETFs
The trading volume for spot bitcoin ETFs has remained robust since their launch on January 11th, reaching a total of $113.5 billion to date. BlackRock’s IBIT, Grayscale’s GBTC, and Fidelity’s FBTC funds have been the leading contributors to this volume. IBIT and FBTC also lead in inflows, while GBTC has experienced outflows totaling over $11 billion according to BitMEX Research data.
Analysts’ Projections Align with Current Market Share
JPMorgan analysts predicted earlier this year that GBTC could see outflows of up to $13 billion in 2024 due to its relatively high fees compared to other spot bitcoin ETFs. They also anticipated a surge in popularity for spot bitcoin ETFs among retail investors, with institutional investors potentially transitioning from futures-based ETFs and GBTC to spot bitcoin ETFs. The current 90% daily volume market share of spot bitcoin ETFs aligns with these projections.
Price Surge Drives Inflows into Spot Bitcoin ETFs
The price of bitcoin has skyrocketed this year, currently trading at around $72,150. Contrary to popular belief, the head of research at FalconX, David Lawant, suggests that more money is flowing into spot bitcoin ETFs due to the cryptocurrency’s price surge, rather than the other way around. While spot ETF inflows were initially driving prices, Lawant believes that recent price increases are also driving inflows to some extent.
Hot Take: Spot Bitcoin ETFs Lead the Way
Spot bitcoin ETFs have quickly become the preferred choice for crypto investors seeking exposure to bitcoin. With nearly 90% of the daily trading volume market share, these ETFs have outperformed futures-based alternatives. The strong trading volume and inflows into spot ETFs indicate a growing interest in direct exposure to bitcoin. As the price of bitcoin continues to surge, it remains to be seen how this will impact investor sentiment and further drive inflows into spot bitcoin ETFs.
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