In case it wasn’t already obvious, the spot Bitcoin (BTC) exchange-traded funds (ETFs) approved in January are hot — with the demand for these new investment vehicles shattering all expectations.
The iShares Bitcoin Trust (IBIT), the largest of the Bitcoin ETFs by assets under management, clocked in over $600 worth of inflows on Monday. IBIT also registered a record $3.36 billion daily trading volume, marking its highest level in roughly six months.
An ETF expert has suggested that this extremely high volume was driven by panic buying of Bitcoin, which is trading just 1.9% away from its current lifetime high.
Speculative Craze Among ETF Investors Now Confirmed
The 10 U.S.-based spot BTC ETFs as a whole posted total daily net inflows of $870 million on Oct. 29 — the largest since the first week of June. This was mainly propelled by a record $642.87 million in net inflows into BlackRock’s Bitcoin ETF, its largest daily inflows in more than seven months.
Fidelity’s FBTC took in $134 million, while Bitwise’s BITB witnessed $52 million in inflows. VanEck’s HODL logged inflows of $16.52 million and Ark and 21Shares’s ARKB saw $12.3 million inflows. The rest of the Bitcoin funds, giving investors exposure to the biggest cryptocurrency, drew in zero inflows.
The total trading volume of all the spot BTC ETFs skyrocketed to $4.75 billion on Tuesday, up from $3 billion on Monday.
“FOMO confirmed,” Bloomberg’s senior ETF analyst Eric Balchunas wrote in an Oct. 29 X post.
Balchunas had noted earlier that the massive trading volume is “a bit odd” since ETF volume spikes during periods of severe market downturns.
“Occasionally the volume can spike if there a FOMO-ing frenzy (a la $ARKK in 2020). Given the surge in price past few days, my guess is this is latter, which means look for (more) big inflows this week,” he explained.
Balchunas also suggested that the extremely high volume across spot BTC ETFs could be a surge in speculative buyers or just heightened activity from arbitrage traders.
“If this is a FOMO frenzy, we’ll see it show up in the flows next few nights. If not, it means it’s due to HF [high frequency] arb trading or something like that,” the Bloomberg analyst said.
BTC ETFs On Track To Overtake Satoshi’s Bitcoin Stockpile
Spot Bitcoin exchange-traded funds are poised to overtake the BTC cache of the mysterious Bitcoin creator, Satoshi Nakamoto, by the end of the year, Balchunas posited.
Currently accumulating roughly 17,000 BTC weekly, these ETFs are anticipated to surpass 1 million BTC next Wednesday, potentially usurping Satoshi’s estimated 1.1 million pile by mid-December before their first birthday.
Bitcoin is now trading for $71,871 after reaching a high of $73,562 per coin earlier today, according to CoinGecko, amid buzz from the upcoming U.S. election.
