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BlackRock and ProShares’ Bitcoin ETFs Surpassed GBTC’s Daily Volumes

February 4, 2024 | by stockcoin.net

blackrock-and-proshares-bitcoin-etfs-surpassed-gbtcs-daily-volumes

BlackRock and ProShares’ Bitcoin ETFs have surpassed the daily trading volumes of Grayscale’s GBTC. On Thursday, BlackRock’s IBIT recorded $306 million in trades, while ProShares’ BITO traded $298 million. In comparison, GBTC saw $291 million in trades. This is the first time that ETF volumes have fallen below $1 billion in a day. These figures indicate a shift in investor preference, as GBTC has previously been the leader in trading volumes since the launch of bitcoin ETFs in early January. Many GBTC investors have been selling their holdings and moving to other providers, resulting in selling pressure. Despite this, all bitcoin ETFs combined hold a total of $28.6 billion worth of bitcoin as of Thursday.

Introduction

This article provides a comprehensive analysis of the daily trading volumes of various Bitcoin exchange-traded funds (ETFs). It compares the volumes of BlackRock’s IBIT and ProShares’ BITO with Grayscale’s GBTC, highlighting the recent trend of the former surpassing the latter in daily trading volumes. The article also explores the reasons behind the increased ETF volumes, including a shift in investor preference, outflows from GBTC, inflows to other providers, and selling pressure and profit-taking. Additionally, the article discusses the influence of FTX on GBTC trading volumes and provides an overview of the combined BTC holdings of all ETFs.

Background

BlackRock’s IBIT and ProShares’ BITO

BlackRock’s IBIT and ProShares’ BITO are two Bitcoin exchange-traded funds that have gained significant attention in the market. These ETFs provide investors with exposure to Bitcoin without the need to directly hold the cryptocurrency. They offer a convenient and regulated investment option for both retail and institutional investors.

Grayscale’s GBTC

Grayscale’s GBTC has been a popular investment vehicle for gaining exposure to Bitcoin since its launch. GBTC is a trust that holds Bitcoin on behalf of its investors, allowing them to trade the trust’s shares on the open market. However, GBTC has faced increasing competition from the newly launched ETFs, leading to a decline in its trading volumes.

Bitcoin ETF volumes

The trading volumes of Bitcoin ETFs have been closely watched by investors and market participants. These volumes indicate the level of interest and activity in the ETFs, providing insights into investor sentiment and market trends. The increasing popularity of Bitcoin ETFs has resulted in higher trading volumes, reflecting the growing demand for these investment vehicles.

After-hours trading

It is important to note that the daily trading volumes mentioned in this article do not include after-hours trading. After-hours trading allows investors to buy and sell securities outside of regular market hours. Including after-hours trading volumes would provide a more comprehensive picture of the overall trading activity in Bitcoin ETFs.

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Comparison of Daily Volumes

IBIT’s daily trading volume

BlackRock’s IBIT has emerged as one of the leading Bitcoin ETFs in terms of daily trading volumes. The fund recorded a daily trading volume of $306 million, surpassing GBTC’s volume.

BITO’s daily trading volume

ProShares’ BITO also experienced a significant increase in daily trading volume, reaching $298 million. Like IBIT, it surpassed GBTC’s trading volume.

GBTC’s daily trading volume

Grayscale’s GBTC, which has been the dominant player in the Bitcoin investment space, witnessed a lower daily trading volume of $291 million compared to IBIT and BITO.

Importance of daily ETF volumes

Daily ETF volumes are crucial indicators of market activity and investor interest. Higher trading volumes suggest greater liquidity and a more active market. The rise of IBIT and BITO in daily trading volumes reflects their growing popularity and market acceptance.

Exclusion of after-hours trading

It is important to note that the daily trading volumes mentioned in this article do not include after-hours trading. Including after-hours trading volumes would provide a more comprehensive understanding of the overall trading activity in Bitcoin ETFs.

Reasons Behind the Increase in ETF Volumes

Shift in investor preference

Investors have shown a preference for Bitcoin ETFs over traditional investment vehicles like GBTC. The launch of IBIT and BITO has provided investors with regulated alternatives that offer greater flexibility and transparency. This shift in investor preference has contributed to the increase in daily ETF volumes.

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Outflows from GBTC

GBTC has faced significant outflows as investors have sought alternatives with lower management fees and better liquidity. The outflows from GBTC have resulted in a decline in its trading volumes and an increase in the volumes of IBIT and BITO.

Inflows to other providers

Other providers, apart from BlackRock and ProShares, have also witnessed inflows as investors diversify their holdings across different Bitcoin ETFs. These inflows have contributed to the overall increase in daily ETF volumes.

Selling pressure and profit-taking

Given the recent surge in Bitcoin prices, many GBTC investors have taken profits and shifted their holdings to other Bitcoin ETFs. This selling pressure has further dampened GBTC’s trading volumes, while boosting the volumes of IBIT and BITO.

FTX’s Influence on GBTC Trading

FTX’s sale of GBTC

FTX, a bankrupt crypto exchange, has sold over $1 billion worth of GBTC. This significant sell-off has had a notable impact on GBTC’s trading volumes, contributing to its decline.

Impact on GBTC trading volumes

FTX’s sale of GBTC has resulted in a decrease in the trust’s trading volumes. This event highlights the interconnectedness of various market participants and their influence on ETF trading volumes.

Combined ETF Holdings

The total bitcoin holdings of all ETFs, including IBIT, BITO, and GBTC, currently amount to $28.6 billion. This figure provides an overview of the collective investment in Bitcoin through these ETFs, showcasing the growing acceptance of cryptocurrencies in the traditional financial space.

Conclusion

The rise of BlackRock’s IBIT and ProShares’ BITO as leading Bitcoin ETFs in terms of daily trading volumes indicates a shift in investor preference and a decline in GBTC’s dominance. The increased ETF volumes can be attributed to factors such as outflows from GBTC, inflows to other providers, and selling pressure from profit-taking. FTX’s sale of GBTC has further impacted its trading volumes. Overall, the combined bitcoin holdings of all ETFs highlight the growing acceptance and adoption of cryptocurrencies in the investment landscape.

Disclosures

Please note that the information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Investing in cryptocurrencies involves risks, and investors should conduct their own research and consult with a financial advisor before making any investment decisions.

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