Bitcoin spot ETFs experienced a record-breaking month in March, with a total trading volume of $111 billion, which was three times higher than the trading volume in February and January combined. The leading Bitcoin ETF, Blackrock’s iShares Bitcoin Trust (IBIT), surpassed the Grayscale Bitcoin Trust (GBTC) in terms of daily volume, trading approximately $42 billion in February and $25 billion in January when the funds first went live. The success of Bitcoin ETFs has been compared to the popularity of Gold ETFs like GLD, which have seen significant outflows in comparison to Bitcoin ETFs, which have already attracted $12 billion in net inflows as of April 1.
BlackRock’s Bitcoin ETF has been a major success story, attracting $7.2 billion in inflows within its first 30 days on the market and currently managing $17.6 billion in assets. The ETF has consistently ranked among the best-traded ETFs on certain days, with its volume reaching $1.9 billion on March 4, ranking 6th under funds like BlackRock’s US Treasury bond ETF and the SPDR. BlackRock’s success has been attributed to the increasing interest in Bitcoin as an investment product, as evidenced by the rapid growth of its assets compared to Grayscale, whose assets have decreased from 650,000 BTC to 350,000 BTC since January.
In a surprising turn of events, GLD surpassed IBIT in volume on Monday, marking a net outflow day for Bitcoin funds overall. This coincided with a recent rally in gold prices, which reached new highs above $2,250. However, the overall trend has been in favor of Bitcoin ETFs over Gold ETFs, with analysts predicting that Bitcoin spot ETFs could sustain their momentum for years to come as more investors gain access to these investment products. BlackRock CEO Larry Fink acknowledged the success of his firm’s Bitcoin ETF, stating that nothing has gained assets as quickly as IBIT in the history of ETFs.
Bitwise CIO Matt Hougan believes that professional investors who are currently unable to buy bitcoin ETFs will gradually gain access to these products through a series of due diligence processes over the next two years. The increasing popularity of Bitcoin ETFs reflects a broader trend in the investment landscape, where traditional assets like Gold are facing competition from digital assets like Bitcoin. As investors seek new opportunities for growth and diversification, Bitcoin ETFs offer a convenient and regulated way to gain exposure to the cryptocurrency market. With the rapid rise in trading volume and assets under management, Bitcoin spot ETFs are poised to become a significant player in the ETF ecosystem.
