Bitcoin ETF Volumes Top $4 Billion With 700,000 Trades on Day 1

All told, there were 700,000 individual trades today in and out of the 11 recently approved spot Bitcoin ETFs, reported industry analyst Eric Balchunas on Jan. 12.

This shows that there was substantial demand for the products on the first day, as total volumes were more than $4.3 billion, according to the figures. 

He added that the non-spot ProShares Bitcoin Strategy ETF (BITO) and Grayscale (GBTC) were both in the top ten among overall ETFs in trading volume. 

All told there were 700,000 individual trades today in and out of the 11 spot ETFs. For context, that is double the number of trades for $QQQ (altho it sees much bigger $ volume bc bigger fish use it) So a lot more grassroots action (vs big seed buys) than I expected which is… pic.twitter.com/syUGfjHQpr

— Eric Balchunas (@EricBalchunas) January 11, 2024

Bitcoin ETFs Take Off

Grayscale’s Bitcoin Trust had just over $2 billion in volume on the first day of trading as a spot ETF after it was permitted to convert the fund. GBTC volume was almost equal to all of the other Bitcoin ETPs combined as it already had a big AUM (assets under management) head start.

On Jan. 12, fellow ETF analyst James Seyffart posted a similar table of trading volumes for day one. 

His calculated total trading volume for the 11 newly launched funds was $4.6 billion. BlackRock and Fidelity were second and third after Grayscale, with volumes of $1 billion and $700K, respectively. 

He added that a lot of the volume may have been investors moving out of GBTC into the new ETFs due to more favorable fee structures or moving from futures-based funds (ProShares) to spot funds. 

“Very easy argument to be made that a ton of this volume was selling of GBTC and buying of other ETFs for now!”

Industry author Vijay Boyapati made a similar conclusion, stating that there are also massive outflows “as many investors rotate out of more costly ways of getting Bitcoin exposure that were available pre-ETF” before adding:  

“Long term, the net flows will be very large and positive.”

Here’s the #Bitcoin ETF Cointucky Derby data via trading volume on day 1 (more volume will continue for a little while).

Total Volume was over $4.6 Billion with $GBTC about half of it. BlackRock & Fidelity went 1 & 2 absent GBTC. pic.twitter.com/t70MzyQfZW

— James Seyffart (@JSeyff) January 11, 2024

Crypto Market Reaction

There has been no discernable reaction in spot Bitcoin markets, with the asset spiking to $49,000 on ETF launch day but retreating to around $46,000 at the time of writing. 

Moreover, total market capitalization remains flat on the day at $1.85 trillion.

Altcoins appear to be taking a breather after their big pumps this week, but analysts have cautioned over a post-ETF market correction as the hype fades for now.