By
Chimamanda U. Martha
April 26th, 2024
Bloomberg ETF analyst Eric Balchunas noted that the overall record-breaking trading volumes weren’t restricted to spot ETFs alone.
On February 28, the US spot BTC exchange-traded funds (ETFs) hit a new daily trading volume of $7.69 billion. The fete shattered the previous record of $4.66B on the launch day, as noted by James Seyffart, a Bloomberg ETF analyst.
The new record for #Bitcoin ETF trading volume is officially $7.69 billion. Previous record was $4.66 billion from launch day. https://t.co/rZsOSUqk35 pic.twitter.com/QaOKe2LuVU
— James Seyffart (@JSeyff) February 28, 2024
A closer look at the individual spot ETF performance showed remarkable performance across the board, except for Grayscale’s GBTC. Most of the spot ETFs doubled their trading volume records. Notably, Blackrock’s IBIT traded US$3.3B, while Fidelity’s FBTC daily trading volume hit $1.4B.
On the other hand, GBTC recorded US$1.86B, just second to Blackrock’s IBIT. However, GBTC also recorded the most outflows worth US$216.4M. On the contrary, IBIT commanded the lead with $612M in inflows, followed by FBTC at $245.2M.
Bloomberg ETF analyst Eric Balchunas noted that the overall record-breaking trading volumes weren’t restricted to spot ETFs alone. He established that BTC ETF futures raked in over $2B, collectively driving spot and futures BTC ETF trading volumes to over $10 billion. Balchunas stated the BTC frenzy was caused by a “natural demand” as opposed to his previous inclination toward algorithmic or arbitrage trading.
But the “natural demand” has turned into a demand shock. James Butterfill, CoinShare’s Head of Research, recently told The Block that the US spot ETFs demand 2,800 BTC per day against 900 BTC produced by miners daily. He termed this a demand shock, noting that BTC has experienced a 28% drop in exchange holdings since 2020.
Bitcoin Wild Price Swings Linked to Spot BTC ETFs
The crazy and record demand by spot ETFs saw BTC briefly hit $64K. However, it retraced sharply following Coinbase’s 3-hour outage, reportedly caused by heavy traffic. At press time, BTC traded at $62.5K, with market watchers speculating an All-Time-High (ATH) retesting before April’s Halving event.
According to Ali Charts, a pseudo-technical analyst on X, BTC’s current price action faced no crucial resistance but had a critical support zone between $54.3K and $56.2K. Over 900K addresses bought about 500,000 BTC within this support zone.
There is literally no resistance ahead of #Bitcoin. All we see is a major support wall between $54,300 and $56,200 where 903,540 addresses bought nearly 500,000 $BTC. pic.twitter.com/ZMeVkWyS4A
— Ali (@ali_charts) February 28, 2024
Additionally, the wild price upswing tipped BTC dominance to almost 53%, per CoinMarketCap. It meant the awaited altcoin season could experience an extra delay as the demand frenzy by spot BTC ETFs escalates.
