ETF Bitcoin - Volumes are gigantic

Trading volumes for Bitcoin ETFs launched by BlackRock, Fidelity, Ark Invest, and others are phenomenal.

Bitcoin Shakes Wall Street

If the volumes are so significant, why isn’t bitcoin moving? We addressed this discrepancy in this article: Why is bitcoin dropping?

We wrote there:

“Clients leaving Grayscale’s GBTC trust (~ 600,000 BTC) cannot simply transfer their bitcoins to the new ETFs at eight times lower fees. They have to sell everything for dollars first. In other words, switching from the GBTC trust to ETFs mechanically triggers a dump of bitcoins on the market. Hence the downward pressure…

By subtracting the net outflows from the GBTC Trust ($579 million, the equivalent of 14,000 BTC), we still get net inflows of +$821 million into the ETFs as a whole. So, why is bitcoin dropping if we have such significant net inflows despite the GBTC fund’s sales?

Because the ETF managers already held BTC in anticipation of D-Day. It is therefore likely that they did not have to buy $821 million worth of bitcoin. Thus, it’s the sales from the GBTC Trust that impact the market most in the short term. “

The impact on the value of bitcoin should then be felt as ETF managers find themselves obliged to buy bitcoins to meet demand.

Regardless, it’s important to realize that the launch of the Bitcoin ETFs has been a resounding success. Trading volumes for the first three days reached ten billion dollars.

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

Analyst Eric Balchunas points out that this represents no less than seven times more volume than the combined volume of the 500 ETFs launched in 2023!

-Fidelity now holds 9,750 BTC
-BlackRock: 11,439 BTC
-Bitwise: 5,540 BTC
-Ark 21 shares: 2,535 BTC
-Vaneck: 1,867 BTC
-Invesco: 1,151 BTC
–Etc..

That’s over 30,000 BTC in total.

Another perspective, the ETFs are currently gobbling up about 15,000 BTC per day. That’s 16 times the number of bitcoins mined each day (900). Considering that in April, after the “halving,” the daily harvest of miners will drop to 450 BTC.

At this rate, it’s just a matter of time before bitcoin climbs back up in anticipation of the halving that will take place around mid-April.