Bitcoin ETFs Surge with $10 Billion Trading Frenzy in Just 3 Days, While GBTC Grapples with Significant Outflows

In a remarkable feat, newly introduced Bitcoin exchange-traded funds (ETFs) garnered an impressive $10 billion in trading volume within just three days. Despite this success, the leading ETF, GBTC, is expected to see a substantial net outflow of approximately $1.173 billion.

Unprecedented Trading Success

Bloomberg ETF analyst James Seyffart provided an update, noting that collectively, the Bitcoin ETFs traded nearly $10 billion in the initial three days. He praised the launches, considering them highly successful, with the exception of Wisdomtree, which held $3.25 million in assets on day three. Seyffart acknowledged the competition as a "LONG race."

Senior ETF analyst Eric Balchunas highlighted the extraordinary success of Bitcoin ETFs compared to traditional ETFs. In 2023, out of 500 ETFs introduced, their total trading volume reached only $450 million, with the most successful achieving $45 million. In contrast, Bitcoin ETFs reached a historic $10 billion in just three days.

GBTC Outflows and Potential Leadership Shift

While Grayscale's ETF, GBTC, led in terms of volume, it faced significant outflows, totaling nearly $600 million since trading began. Seyffart anticipated that the day with triumphant trading volume would coincide with a net outflow for Bitcoin ETFs.

Approximately $594 million exited GBTC, contributing to a total outflow of $1.173 billion. Although other Bitcoin ETFs experienced inflows, doubts persist on whether these can offset the drainage from GBTC.

IBIT Emerging as "Liquidity King"

Balchunas pointed to BlackRock's ETF, IBIT, as a potential successor to GBTC as the "Liquidity King." He emphasized the challenge of generating substantial trading volume in the ETF space, noting that it is harder to achieve than attracting fund flows. Balchunas stressed the importance of natural volume formation for the longevity and success of an ETF.