Spot Bitcoin exchange-traded funds (ETFs) saw trading volume hit a record $111 billion in March, nearly triple the $42 billion traded in February.
Approved earlier this year by the SEC, US spot bitcoin ETFs quickly gained traction with investors. Their volumes last month exceeded even the most optimistic expectations.
NEW: #Bitcoin ETFs saw a record $111 BILLION in March volume.
It’s TRIPLE the influxes of February 🤯 pic.twitter.com/Ol1PaS8vC9
– Bitcoin Magazine (@BitcoinMagazine) April 3, 2024
According to Bloomberg ETF analyst Eric Balchunas, the trading volume in March was approximately three times that of February and January. This massive rise indicates that spot bitcoin ETFs are meeting strong demand from institutional and retail investors.
He said: “I can’t imagine April being bigger, but who knows.”
BlackRock's Bitcoin ETF (IBIT) leads the pack, capturing 50% of total volume. Grayscale's GBTC took second place with 20%, while Fidelity's FBTC followed with 17%.
Balchunas declared IBIT the “$GLD of bitcoin,” referring to the massive SPDR Gold ETF. He said its victory in March made IBIT the undisputed leader among Bitcoin ETFs.
The increase in trading activity aligns with Bitcoin's rise to new all-time highs in March. However, this also suggests that spot ETFs are changing market dynamics and generating new demand.
Critics initially argued that Bitcoin markets would ignore new products. Still, flows into funds like IBIT and FBTC have been overwhelmingly positive.
Demand far exceeds mined bitcoin. ETFs purchased around 66,000 BTC in March, while miners produced only 28,500. This imbalance between supply and demand appears poised to become more pronounced as more Investors gain exposure via ETFs and newly mined coins are halved in two weeks during the Bitcoin halving event.
With strong capital inflows, assets under management and trading activity, these new regulated instruments have firmly established themselves in the Bitcoin markets. If March is anything to go by, their rise has only just begun.