$10 Billion Record: Cumulative trading volume over the first three days for Bitcoin “spot” ETFs reached an unprecedented $10 billion. Following last Friday’s historic day, trading remained highly active in New York and Chicago, with $1.8 billion in shares exchanged. Notably, Grayscale is at the center of attention, as data shows massive outflows from its GBTC in favor of BlackRock and Fidelity.
Day 3 of Bitcoin ETFs Sees $1.8 Billion in Volumes
The Bitcoin spot ETFs continue their historic start. Approved on Wednesday evening by the U.S. SEC, these new funds, directly invested in cryptocurrency, began trading on Friday on Nasdaq in New York and Chicago. The first day lived up to the expectations generated by such investment vehicles, with $3 billion in trading volumes.
Last night, at the close of the U.S. markets, volumes surpassed $1.8 billion. Bloomberg Intelligence analyst James Seyffart broke down this statistic for his X subscribers. According to his data, Grayscale’s GBTC fund took the lion’s share, accounting for over 50% of the shares traded. Behind it, unsurprisingly, are BlackRock’s IBIT fund and Fidelity’s FBTC fund.
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
However, Bloomberg’s data also reveals that Grayscale’s fund saw red: over the first two days, investors withdrew over $579 million from the vehicle! A stark contrast to the positive inflows seen in competing funds, all of which experienced an influx of investors, led by BlackRock (collecting $497 million).
“Thanks to the conversion of ETFs, we now have a clear view of GBTC flows for the first time,” writes James Seyffart. It has become clear that investors have been massively selling their GBTC shares since day one. For Seyffart, this is not surprising as “much of this capital will be reinvested in other Bitcoin exposures.”
It’s worth noting that since its launch in 2013 until its conversion into a true ETF last Wednesday, GBTC was a private trust, still managing $26 billion (equivalent to nearly 620,000 underlying bitcoins). Shares of this trust were traded only over-the-counter, not on the open market, and at a discount to their intrinsic value.
Now that shares are freely traded, investors are migrating en masse to the more cost-effective Bitcoin spot ETFs. With a fee ratio of 1.5%, GBTC is by far the most expensive among the eleven recently launched ETFs. The second most expensive, VanEck Bitcoin Trust (HODL), charges 0.25%.
Meanwhile, BlackRock’s iShares Bitcoin Trust (IBIT) leads in terms of inflows. It emerges as the big winner from GBTC’s troubles, with net inflows of $498 million. Fidelity Wise Bitcoin Trust (FBTC) from Fidelity follows at a considerable distance, with net inflows of $422 million.
