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- Newly launched Bitcoin ETFs achieved a record of $10 billion in trading volume in just three days.
- Grayscale’s ETF, GBTC, faces considerable outflows of nearly $600 million.
- BlackRock’s ETF, IBIT, is identified as a potential “Liquidity King” likely to overtake GBTC in trading activity.
In just three days after their introduction, the newly launched Bitcoin exchange-traded funds (ETFs) amassed a staggering $10 billion in trading volume. However, it is expected to experience a substantial net outflow of around $1.173 billion.
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
Providing an update on the Bitcoin ETF, Bloomberg ETF analyst James Seyffart revealed that the ETFs collectively traded nearly $10 billion in the first three days. He commented on the success of the launches, stating, “By most any metric — these are all very successful launches. The only caveat to that might be Wisdomtree at just $3.25 million in assets, but it’s only day 3 — this is a LONG race.”
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 COMBINDED $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… https://t.co/wV1zQFtPW1— Eric Balchunas (@EricBalchunas) January 16, 2024
Senior ETF analyst Eric Balchunas offered a compelling perspective on the unprecedented success of the Bitcoin ETFs. He highlighted that out of the 500 ETFs introduced in 2023, their total volume traded amounted to only $450 million, with the most successful achieving a modest $45 million. In contrast, the Bitcoin ETFs have reached a historic $10 billion in just three days.
“$IBIT alone is seeing more activity than the entire ’23 Freshman Class,” Balchunas remarked, highlighting the extraordinary level of interest and engagement in the newly introduced Bitcoin ETFs.While Grayscale has been a leader in terms of volume, its ETF, GBTC, has faced considerable outflows, totaling nearly $600 million since it started trading. Seyffart anticipated that the same triumphant day in terms of trading volume would be a net outflow day for the Bitcoin ETFs.
The financial analyst estimated that approximately $594 million exited GBTC, contributing to a total of $1.173 billion in outflows. While other Bitcoin ETFs experienced inflows, doubts linger on whether these inflows can offset the nearly $600 million drainage from GBTC.
According to Balchunas, BlackRock’s ETF, IBIT, is “most likely to overtake” GBTC as “Liquidity King.” Balchunas also underscored the difficulty of generating significant trading volume in the ETF space, stating that it is harder to achieve than attracting fund flows or accumulating assets. According to him, “volume has to form naturally in [the] marketplace, can’t really be faked,” making it a crucial factor for the longevity and success of an ETF.
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