Bitcoin ETF – The volumes are gigantic

Trading volumes on Bitcoin ETFs launched by BlackRock, Fidelity, Ark Invest and others are phenomenal.

Bitcoin shakes up Wall Street

If the volumes are so high, why is bitcoin not moving? We addressed this discrepancy in this article: Why is bitcoin falling?

We wrote there:

“Customers leaving Grayscale’s GBTC trust (~600,000 BTC) cannot simply transfer their bitcoins into the new ETFs at eight times lower fees. First they have to sell everything for dollars. In other words, the transition from the GBTC trust to ETFs mechanically triggers a dump of bitcoins on the market. Hence the downward pressure…

Subtracting the net outflows from the GBTC Trust ($579 million, the equivalent of 14,000 BTC), we still get net inflows of +$821 million across all ETFs. So why is bitcoin falling if we have such large net inflows despite GBTC fund sales?

Because the ETF managers already held BTC in anticipation of the big day. It is therefore likely that they did not have to buy $821 million worth of bitcoin. It is therefore the sales of the GBTC Trust which have the greatest impact on the market in the short term. »

The impact on the value of bitcoin should then be felt as ETF managers find themselves forced to buy bitcoins to satisfy demand.

Regardless, you have to realize that the launch of Bitcoin ETFs is a resounding success. Volumes for the first three days of trading reached ten billion dollars.

Analyst Eric Balchunas points out that this represents no less than seven times more than the combined volume of the 500 ETFs launched in 2023!

-Fidelity now holds 9,750 BTC
-BlackRock: 11,439 BTC
-Bitwise: 5,540 BTC
-Ark 21 shares: 2,535 BTC
-Vaneck: 1867 BTC
-Invesco: 1,151 BTC

More than 30,000 BTC in total.

Another perspective, ETFs are currently swallowing around 15,000 BTC per day. This represents 16 times the number of bitcoins mined each day (900). Knowing that in April, after the “halving”, the daily harvest of miners will drop to 450 BTC.

At this rate, it is only a matter of time before bitcoin rises again pending the halving which will take place around mid-April.

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