Cryptocurrency ETFs Hit Historic Milestone with $2 Billion in Daily Trades

Bitcoin Exchange-Traded Funds (ETFs) experienced a landmark day on February 20, with trading volumes soaring to approximately $2 billion across nine ETFs. This surge, highlighted by Bloomberg Intelligence’s Eric Balchunas, represents the most significant single-day trading activity for Bitcoin ETFs since their inception.

The Nine had biggest volume day since Day One with about $2b in combined trading thx to big contributions from $HODL, $BTCW and $BITB which all broke their personal records. For context $2b in trading would put them in Top 10ish among ETFs and Top 20ish among stocks. It's a lot. pic.twitter.com/547pIl5grI
— Eric Balchunas (@EricBalchunas) February 20, 2024

Notably, ETFs such as HODL, BTCW, and BITB played a pivotal role in achieving this record, each surpassing their previous trading volume highs. The substantial trading volume not only underscores the growing interest in Bitcoin as an investment but also places these ETFs among the top 10 ETFs and top 20 stocks in terms of trading activity per Balchunas.

VanEck’s spot Bitcoin ETF emerged as a standout performer, with trading volumes eclipsing $300 million, marking a significant milestone compared to its past performance. According to Yahoo Finance data, this volume is a stark contrast to its initial launch day volume of $25.5 million on January 11.

The trading frenzy around VanEck’s Bitcoin Trust ETF (HODL) was particularly noteworthy as it drew in over 32,000 individual traders. This activity significantly exceeded the average for VanEck’s new ETF offerings. Balchunas speculated on various factors that could have driven this surge, including the influence of social media.

Amidst this, WisdomTree’s Bitcoin Fund (WBTC) also exhibited an exceptional increase in trading volume. Bloomberg data cited by Balchunas showed the fund’s trading volume catapulting approximately 1,200% above its average to a total of $154 million for the day. Additionally, the number of individual trades for WBTC surged to 23,000, a stark contrast to the 221 trades recorded in the previous session.

In response to the competitive landscape, VanEck has even announced a reduction in fees for its Bitcoin ETF, positioning it more favorably against competitors like BlackRock and Fidelity. This strategic move, effective from February 21, is part of VanEck’s broader efforts to support the Bitcoin ecosystem, including a commitment to allocate a portion of its ETF profits to Bitcoin core developers.

More insights regarding the recent surge came from Michael Saylor, CEO of MicroStrategy, who discussed the influx of capital from traditional to digital platforms via Bitcoin ETFs in a Bloomberg interview. Saylor’s observations did not project future market directions but rather reflected on the current investment landscape, comparing Bitcoin’s appeal to traditional assets like gold, real estate, and the S&P Index.