Forbes India 15th Anniversary Special

Spot Bitcoin ETFs hit $10 billion trading volume amid record BTC high

BlackRock's iShares Bitcoin ETF (IBIT) led the trading volume with $3.7 billion, followed by the Grayscale Bitcoin Trust (GBTC) with $2.8 billion

Shashank Bhardwaj
Published: Mar 6, 2024 03:30:35 PM IST

Spot Bitcoin ETFs hit  billion trading volume amid record BTC highImage: Shutterstock

On March 5, U.S.-based spot Bitcoin (BTC) exchange-traded funds (ETFs) witnessed a historic trading volume, surging to $10 billion. This milestone coincided with Bitcoin reaching a new all-time high of $66,004. Remarkably, these ETFs, which are less than two months old, have demonstrated robust performance.

BlackRock’s iShares Bitcoin ETF (IBIT) led the trading volume with $3.7 billion, followed closely by the Grayscale Bitcoin Trust (GBTC) with $2.8 billion, and the Fidelity Wise Origin Bitcoin Fund (FBTC) with $2 billion.

On this day, Bitcoin experienced price swings during U.S. trading hours. It peaked at $69,200 around 3:00 pm UTC on March 5, only to plummet by 12% to a low of $60,860 five hours later. As of the latest update, Bitcoin has partially recovered, currently trading at $63,350.

Both IBIT and FBTC witnessed an 8.6% decline in value on the same day, with other spot Bitcoin ETFs recording similar price drops. This volatility highlights the unpredictable nature of Bitcoin trading.

Last week, significant trading activity in Bitcoin ETFs was primarily driven by substantial net inflows, attracting over $1.7 billion in fresh investments. However, recent market activity suggests a shift towards profit-taking, as traders capitalise on Bitcoin's 50% price surge over the past month.

The surge in trading volume of spot Bitcoin ETFs reflects the growing interest in Bitcoin investment opportunities. However, amidst the market's unpredictability, investors are increasingly cautious, leading to a surge in profit-taking activities.

Optimistic sentiment in the derivatives market has also contributed to Bitcoin's upward trajectory, with investors leveraging their positions up to 100 times using products like perpetual futures. However, this optimism has its risks, as evidenced by over $800 million worth of bullish positions facing liquidation in the perpetual futures market.

It's essential to note that while Bitcoin presents promising investment opportunities, its volatile nature necessitates caution and vigilance. As the crypto market evolves, investors must stay informed and adapt their strategies accordingly.
 
Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist.
Twitter: @bhardwajshash