• 29 May, 2024

Bitcoin ETF Trading Volume Hits $5.65B as Hedge Funds Invest Heavily

Bitcoin ETF trading volume has recently reached new highs, with significant activity observed in major funds. According to Santiment, the combined trading volume of the seven largest Bitcoin ETFs hit $5.65 billion, marking the highest day since March 24th. This uptick shows a shift in investor behavior. 

An analysis of the trading volumes for seven major Bitcoin ETFs—GBTC, IBIT, FBTC, ARKB, BTCO, BITB, and HODL—reveals significant fluctuations from January 11, 2024, to April 1, 2024. The total trading volume started at around $2.5 billion on January 11, 2024, have raised approximately to $5 billion by January 22, 2024. From mid-January to mid-February, the volume stabilized, fluctuating between $2 billion and $3 billion. A notable spike occurred around February 26, with volumes soaring past $9 billion and peaking at $11.64 billion on February 27. March witnessed considerable volatility, with significant peaks on March 5 and March 20, reaching $10 billion and $8 billion, respectively. By April 1, the volume had declined to $3.61 billion.

The Grayscale Bitcoin Trust (GBTC) experienced varied trading volumes over the same period. Starting at about $1.5 billion on January 11, 2024, the volume dropped to roughly $400 million by January 22. Throughout February, GBTC’s volume remained relatively low, generally below $1 billion. A peak was observed on March 5, with the volume hitting around $3 billion. Post-March 5, the volume steadily decreased, settling at approximately $720.96 million by April 1, 2024.

The flow of GBTC demonstrated consistent outflows throughout the analyzed period. Starting from January 11, 2024, the data shows ongoing negative flows, indicating persistent outflows. Major outflows were recorded around February 5 and March 15, with values reaching approximately -$883.7 million. By the end of March and early April, the outflows had reduced, with the flow recorded at -$106.65 million on April 1, 2024.

In addition to the trading volume trends, recent SEC filings highlight significant investments by major hedge funds in Bitcoin ETFs per Colin Wu reports. Millennium Management, one of the world’s largest hedge funds, holds a substantial $2 billion spot Bitcoin ETF portfolio. 

This portfolio includes $844.2 million in BlackRock’s IBIT, $806.7 million in Fidelity’s FBTC, $202 million in Grayscale’s GBTC, $45 million in Ark’s ARKB, and $44.7 million in Bitwise’s BITB. Similarly, Schonfeld Strategic Advisors disclosed a $479 million investment, with $248 million in IBIT and $231.8 million in FBTC. These investments position Millennium and Schonfeld as significant players in the Bitcoin ETF market, reflecting a growing trend among traditional financial firms to invest in cryptocurrency assets.

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