Bitcoin ETF Surpasses $10B in 3 Days

Despite the spot Bitcoin exchange-traded fund (ETF) rollout not yielding the anticipated short-term effects on the broader cryptocurrency market, the product's performance is noteworthy.

Specifically, within the initial three days of launch, the ETFs amassed an impressive $9.6 billion in trading volume, as reported by Bloomberg Intelligence ETF analyst James Seyffart.

Breaking down the numbers, Grayscale Bitcoin Trust (GBTC) took the lead in the first three days, recording $5.12 billion, followed by iShares Bitcoin Trust (IBIT) at $1.99 billion. Fidelity Wise Origin Bitcoin Fund (FBTC) secured the third position with $1.46 billion.

To provide context to this performance, Senior Bloomberg ETF analyst Eric Balchunas pointed out that the trading volume surpassed the entire 2023 class of ETFs. It is essential to note that the spot Bitcoin (BTC) ETF received approval on January 10.

In a post on X dated January 17, Balchunas emphasized the challenges of generating volume for ETFs, highlighting that the 500 ETFs launched in 2023 collectively achieved only $450 million in volume.

He underscored the fact that ETF volume must naturally develop in the market and cannot be artificially induced. Furthermore, he noted that half of the 500 newly launched ETFs from the 2023 class did less than a million in volume on the same day, emphasizing the difficulty of garnering significant trading activity.

A considerable portion of the volume in the Grayscale product can be attributed, in part, to selling pressure primarily from GBTC holders. Notably, a report indicated that James Lavish, a reformed hedge fund manager and managing partner at the Bitcoin Opportunity Fund, suggested that a significant portion of the volume resulted from GBTC holders selling to transition to the spot ETF.

He highlighted that this selling pressure was partly responsible for the ETF launch falling short of expectations.

While the trading volume did not directly impact the crypto market, it underscores a potential growing interest among investors in gaining exposure to cryptocurrencies within the traditional financial market.