Bitcoin ETFs surpass triple all 500 ETFs launched in 2023 combined

The total trading volume of 10 newly approved spot Bitcoin ETFs made a new record by exceeding the cumulative daily volume of all 500 ETFs launched in 2023 combined, as per the date from Yahoo Finance.

The data revealed that on January 16, these Bitcoin ETFs collectively generated a trading volume of just above $1.8 billion, eclipsing the entire 2023 ETF launch volume by over three times.

Cumulatively, this is from Grayscale, BlackRock, and Fidelity, whose offerings contributed a substantial $1.6 billion to the overall total.

Despite a slight decline in trading volume from the initial peak, the total volume for these spot Bitcoin ETFs peaked close to $10 billion in just three days, as confirmed by Bloomberg’s ETF analyst James Seyffar.

Meanwhile, BlackRock’s iShares Bitcoin Trust has amassed over $497 million in net inflows in the past three days. This surge positions it to potentially overtake Grayscale’s dominant market position despite Grayscale’s ETF witnessing significant outflows, shedding over $579 million since its market debut last week.

Grayscale, however, still holds an impressive $27 billion in assets under management.

Let me put into context how insane $10b in volume is in first 3 days. There were 500 ETFs launched in 2023. Today, they did a COMBINDED $450m in volume. The best one did $45m. And many have had months to get going. $IBIT alone is seeing more activity than the entire '23 Freshman… https://t.co/wV1zQFtPW1

— Eric Balchunas (@EricBalchunas) January 16, 2024

Grayscale’s Losses and ARK Invest’s Strategic Shifts

The Grayscale Bitcoin Trust (GBTC) has recently faced a significant loss. Approximately $1.1 billion has flowed out of GBTC in the last three days, triggered by investors rushing to exit after the fund’s discount narrowed to its lowest level in nearly three years.

This mass departure resulted in a $594 million outflow on January 16 alone, according to Bloomberg ETF analyst James Seyffart. While other recently launched Bitcoin ETFs experienced inflows, doubts lingered over whether these inflows could offset the massive outflow from GBTC.

Grayscale’s GBTC, once a profitable trade due to its premium, faced challenges when the premium turned into a discount in February 2021. The minimum six-month lock-up period imposed on investors worsens the situation, trapping many unwilling to sell shares at a worsening discount.

Following GBTC’s conversion to a spot ETF and a discount low of 1.55%, investors who endured the extended lock-up period are now exiting. The estimated $1.17 billion outflow from GBTC represents about 27,000 Bitcoin at the current price of around $42,800.

Simultaneously, Cathie Wood’s ARK Invest made strategic moves by stacking its newly approved ARK 21Shares Bitcoin ETF (ARKB) and divesting from shares of the Proshares Bitcoin Strategy ETF (BITO) and other tech-focused assets in its ARK Next Generation Internet ETF.

ARKB currently holds 2,535 Bitcoin, making it the fifth-largest Bitcoin holding among the 10 spot Bitcoin ETF issuers.

Related: ARK Invest and 21Shares Seek Approval for Spot Ether ETF

Competitors such as Ark Invest and 21Shares, along with Bitwise, marked their presence with significant trading volumes of approximately $124 million and $52 million, respectively, on January 16.

However, other offerings from Invesco, VanEck, Franklin Templeton, Valkyrie, and WisdomTree observed more modest volumes of $10 million or less.

Despite these variations, the cumulative trading activity for these new ETFs remains very large, exceeding $9.5 billion over three days.