In March, Bitcoin spot ETFs saw a significant increase in trading volume, reaching a record high of $111 billion. This marked a significant increase from the previous two months, where the funds collectively traded around $42 billion in February, and $25 billion in January. Blackrock’s iShares Bitcoin Trust (IBIT) has emerged as the leading Bitcoin ETF for daily volume, surpassing the Grayscale Bitcoin Trust (GBTC). Bloomberg ETF analyst Eric Balchunas noted that IBIT has become the “GLD of Bitcoin” in terms of volume and profitability.
Gold ETFs, such as GLD, have experienced outflows compared to Bitcoin ETFs over the past few months. Bitcoin ETFs have seen significant net inflows, amounting to $12 billion as of April 1. However, GLD managed to surpass IBIT in volume on a day when Bitcoin funds experienced a net outflow. The recent rally in gold prices, reaching new highs above $2,250, has also impacted the performance of gold ETFs versus Bitcoin ETFs.
Blackrock’s Bitcoin ETF has been a resounding success since its launch, attracting more inflows than any other ETF in history within its first 30 days on the market. It absorbed $7.2 billion within that time frame and currently holds $17.6 billion in assets. The ETF has also ranked among the best-traded ETFs on certain days, with its volume exceeding $1.9 billion on March 4. Additionally, its assets have nearly caught up to Grayscale’s, which have decreased from 650,000 BTC to 350,000 BTC since January.
Blackrock CEO Larry Fink acknowledged the remarkable success of the firm’s Bitcoin ETF, stating that nothing has gained assets as quickly as IBIT in the history of ETFs. Analysts, including Bitwise CIO Matt Hougan, believe that Bitcoin spot ETFs could maintain their momentum for years to come as more investors gain access to these investment products. Despite the positive performance of Bitcoin ETFs, Hougan noted that many professional investors still cannot invest in these products, but this is expected to change over the next few years through due diligence processes.
The surge in trading volume and popularity of Bitcoin spot ETFs in March highlights the increased interest in digital assets among investors. The success of Blackrock’s IBIT and other Bitcoin ETFs signals a growing acceptance of cryptocurrencies as legitimate investment options. With record-breaking trading volumes and substantial inflows, Bitcoin ETFs have established themselves as significant players in the financial markets. The ongoing competition between Bitcoin and gold ETFs also reflects shifting investor preferences and market dynamics in the current economic landscape.
