Key Points
- US spot Bitcoin ETFs have hit new records in trading volumes and flows.
- Grayscale’s GBTC has seen a 33% drop in BTC holdings due to significant outflows.
US spot Bitcoin exchange-traded funds (ETFs) have been incredibly successful, pushing the cryptocurrency close to its 2021 all-time high of $69K.
These ETFs have set new records in terms of flows and daily trading volumes.
Record-Breaking Trading Volumes
On March 4, the ETFs saw their second-largest trading volume of $5.5B, as reported by Bloomberg senior ETF analyst Eric Balchunas.
Blackrock’s iShares Bitcoin Trust (IBIT) accounted for $2.4B of the overall trading volume on that day and surpassed $11B in assets under management (AUM).
Furthermore, each ETF experienced a 30% increase in trading volume in the past six days.
Eric suggested that the high trading volumes were becoming the new normal.
Significant Outflows in GBTC
Despite the record-breaking trading volumes, ETFs, particularly Grayscale’s GBTC, have seen substantial outflows.
Outflows refer to the selling of investment products or capital outflows.
Since its conversion to an ETF on January 11, 2024, GBTC has seen consistent outflows in its trading sessions.
On March 4, while the net flow for all the spot ETFs hit $562M, GBTC recorded an outflow of $368M.
Other smaller spot BTC ETFs like Invesco’s BTCO, VanEck’s HODL, and Wisdomtree’s BTCW also noted outflows on the same day.
Since the ETF conversion day, GBTC has seen a cumulative outflow of $9.266B.
This equates to 202.87K BTC sold by investors who previously held shares in GBTC.
On March 4 alone, GBTC recorded an outflow of 5,450 BTC, indicating a 33% decrease in BTC holding since the ETF conversion.
Before the conversion on January 11, GBTC held 624.28K BTC at an average price of $46K, worth around $28.7B.
Currently, GBTC’s BTC holding has dropped to 434.36K.
Several reasons have been suggested for the massive GBTC outflows.
Initially, high fees charged by GBTC were the primary reason.
Other spot BTC ETFs and investment products offered investors cheaper ways to access BTC, leading to either cashing out or seeking alternative options after the conversion.
Additionally, bankrupt firms selling off their stake in GBTC to pay their creditors also contributed to the outflows.
The combined effect of these factors led to the outflows and reduced GBTC’s BTC holding.
