- BlackRock’s Bitcoin ETF volume surpassed its own record by more than 30%.
- NYDIG stated that high volume does not imply strong investor interest.
Spot Bitcoin ETFs have seen explosive growth recently. On February 26, combined daily trading volume for the nine new ETFs reached a staggering $2.4 billion.
This milestone was shared by Eric Balchunas, a senior ETF analyst at Bloomberg, on X (formerly Twitter). He said,
“It’s official…the New Nine Bitcoin ETFs broke the all-time volume record today with $2.4 billion, barely better than day one, but about double their recent daily average.”
The Bitcoin ETF market is heating up
This impressive figure excluded the Grayscale Bitcoin Trust [GBTC]which has the largest pool of assets under management (AUM) in the category.
However, when GBTC is taken into accountfellow Bloomberg analyst James Seyffart revealed,
“The entire Bitcoin ETF category had its second most traded day ever, with a value of $3.2 billion. The only bigger day was launch day, when they traded at $4.6 billion.”
Balchunas admitted that there was uncertainty about the source of this renewed or continued interest in Bitcoin [BTC] However, ETFs noted that trading volumes tend to increase on the first trading day of the week.
Cumulative trading volume for all spot Bitcoin ETFs has surpassed $52 billion since their launch in mid-January, according to data from CoinShares.
BlackRock Bitcoin ETF Records Record High
BlackRock’s iShares Bitcoin Trust [IBIT] emerged as the leader, raising a whopping $1.29 billion. IBIT had $6.6 billion in assets under management at the time of writing.
Fidelity [FBTC] followed closely with a daily volume of $576 million, while the ARK 21Shares [ARKB] and Bitwise [BITB] ETFs saw inflows of $276 million and $81 million, respectively.
Earlier in the day, IBIT marked a trading milestone of $1 billion in assets to date. This performance not only placed it 11th among all ETFs, putting it in the top 0.3%, but also among the top 25 stocks.
Why is IBIT increasing?
While explaining IBIT’s remarkable success, Balchunas noted:
“BlackRock is Godzilla-sized with massive distribution, a trusted brand, and they are well known in the trading world (dozens of their ETFs do over $200 million a day), so it is not surprising that they are breaking away in terms of volume.”
He explained that while trading volume does not directly equate to fund inflows, it is still critical in the long run. Furthermore, high liquidity reduces transaction costs and friction while increasing anonymity.
This level of trading volume, according to Balchunas, can be qualified as ‘big boy level volume’, enough to attract the attention of large institutional investors, especially considering that it competes with ten other funds.
High volume does not equal new money
Amid these developments, NYDIG cautioned that high volume is not an immediate sign of investor interest. Greg Cipolaro, NYDIG’s global head of research, said:
“Daily trading volume is not a reliable indicator of daily cash flows, a misconception prevalent in the industry.”
Instead, he advocated assessing a fund’s turnover ratio – the quotient of dollar trading volume over net asset value – as a more reliable measure.
Cipolaro noted that the overall turnover ratio for spot Bitcoin ETFs was 5.3%. The lowest numbers were observed in Valkyrie [BRRR] and Grayscale’s GBTC, 2.2% and 2.4%, respectively.
