Crypto investment products have recorded a net outflow of approximately $424 million this week since Monday — as indicated by data from CoinShares. James Butterfill, CoinShares’ Head of Research, stated that “the newly issued U.S. spot bitcoin ETFs have now seen $2 billion inflows.”
Butterfill noted that funds — such as the ProShares Bitcoin BTC +0.72% Strategy ETF (BITO), which track bitcoin futures, and Grayscale’s GBTC fund — have seen net outflows since the week’s start. He mentioned this shift is occurring as institutional investors shift their focus to other recently approved spot bitcoin ETFs.
"There has been a net outflow so far this week of $424 million as investors switch to cheaper U.S. funds. GBTC saw $1.18 billion in outflows since the spot bitcoin ETF was launched, and BITO saw $141 million outflows this week," Butterfill posted on X.com.
Among the top five crypto flows by provider, based on the year-to-date amount, four consist of newly issued spot bitcoin ETFs.
The U.S. Securities and Exchange Commission approved 11 spot bitcoin ETFs last week, including BlackRock's iShares Bitcoin Trust and ARK 21Shares Bitcoin ETF.
Trading of the new products began last Thursday. In the first day of trading, spot bitcoin ETFs generated nearly $4.6 billion in buying and selling. "The first day's trading volume is the largest on record, with the prior largest being May 2021 at $4.3 billion," Butterfill told The Block.
"Typically we see between $400 million and $800 million a day. Given the hype surrounding the ETF launches it doesn’t surprise me it was this high, and it also elevated turnover in European ETPs too," he added.
Subsequent trading days record less volume
The second and third days of trading did not replicate the performance of the first day for spot bitcoin ETFs. Nevertheless, Butterfill explained that this is a typical pattern and should not be interpreted as a decline in interest. "I don’t believe a dip signifies lower interest; it is very common to see a flurry of trading on the first day. Given a few more trading days we will have a much clearer picture on trading activity," Butterfill said.
According to Bloomberg Intelligence analyst Eric Balchunas, spot bitcoin ETF trading volume has now reached over $10 billion in the first 3 days. To contextualize the importance of a $10 billion trading volume within the first three days of trading, Balchunas posted on X.com that in 2023, 500 ETFs were launched, which collectively generating $450 million in trading volume on Tuesday.
"The best one did $45 million. And many have had months to get going. IBIT alone is seeing more activity than the entire 2023 freshman class," he added.
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