Bitcoin exchange-traded funds (ETFs) have recently witnessed a substantial increase in trading activity, marking their most active session since their introduction in January. This surge in trading volume highlights the growing interest and adoption of Bitcoin ETFs among investors.
The heightened trading activity is a result of various factors that are driving investor sentiment and market dynamics within the cryptocurrency ecosystem. It is worth noting that this surge follows previous milestones, such as the impressive trading volumes observed during the initial days of Bitcoin ETFs’ launch.
Bitcoin ETF frenzy: Record-breaking influx of investors into the market
Bitcoin (BTC) exchange-traded funds have experienced the highest level of activity since their debut in the United States last month. According to Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, the trading volume reached approximately $2 billion, the largest since the first day of trading on January 11.
VanEck’s HODL ETF recorded nearly $400 million in activity, while WisdomTree Bitcoin Fund (BTCW) and BitWise had $221.9 million and $178.29 million in trades, respectively. Balchunas noted that VanEck’s HODL ETF “is going wild today with $258 million in volume already, a 14x jump over its daily average.” He further added that it was not just one major investor driving this surge, but rather 32,000 individual trades, which is 60 times its average.
It is speculated that the reason behind this increase is the closure of US markets on Presidents’ Day, resulting in the finalization of trades made over the weekend on the first working day after the holiday.
Bitcoin’s market performance and its impact on ETFs
Spot Bitcoin exchange-traded funds (ETFs) have been consistently attracting inflows over the past week, outperforming all other exchange-traded products (ETPs) listed in the US. A recent report from Bitfinex Alpha revealed that ETFs witnessed net positive inflows of over $2.2 billion for the second consecutive week between February 12 and 16. These inflows helped Bitcoin rebound after a brief decline following the release of the Consumer Price Index (CPI) data.
The majority of the inflows were directed towards BlackRock’s IBIT ETF, which received $1.6 billion. This fund alone has received $5.2 billion year-to-date (YTD), accounting for more than half of the asset manager’s total net inflows across all its ETFs. Fidelity’s FBTC had the second-highest volume last week, attracting $648.5 million. It was followed by Ark Invest/21Shares’ ARKB and Bitwise’s BITB, which raised $405 million and $232.1 million, respectively.
On the other hand, Grayscale’s GBTC continued to experience outflows, with investors withdrawing $624 million in the past week. Bitfinex stated that the ETF’s capital depletion has exceeded $7 billion since its conversion from an over-the-counter commodity to an ETP in January, approved by the US Securities and Exchange Commission (SEC).
The steady inflows into spot Bitcoin ETFs coincide with BTC reaching a new year-to-date high of $52,900, the first time since December 2021. Analysts have reported that, throughout 2021, BTC’s daily closing price surpassed this new threshold on only 114 days, accounting for 2.29% of its trading history.
As of now, Bitcoin (BTC) is valued at $51,966.33, experiencing a 0.2% decrease from an hour ago, but a 0.4% increase from yesterday. Its current value represents a 4.9% growth compared to seven days ago.
The global crypto market cap now stands at $2.08 trillion, witnessing a 0.81% increase in the last 24 hours and an 80.13% growth compared to a year ago. BTC’s market cap is currently $1.02 trillion, reflecting a 48.95% dominance. Meanwhile, stablecoins hold a market cap of $140 billion, accounting for 6.71% of the total crypto market cap.
