BlackRock and ProShares ETFs Surpass Grayscale Bitcoin Trust in Trading Volume

GBTC selling starts to decrease, while volumes increase from BlackRock and ProShares spot Bitcoin ETFs.

The daily trading volume of BlackRock and ProShares Bitcoin ETFs has surpassed GBTC.

📈 Bitcoin (BTC) traded between $42,580 and $43,422 on Feb. 2 as the Grayscale Bitcoin Trust’s (GBTC) grasp on spot Bitcoin exchange-traded fund (ETF) selling took a pause. But what’s behind this development? Let’s take a closer look.

BlackRock and ProShares ETFs Take the Lead

Grayscale’s GBTC ETF had been dominating the spot Bitcoin ETF market in terms of daily volumes since the products began trading on Jan. 11. However, on Feb. 1, BlackRock’s iShares Bitcoin Trust (IBIT) and ProShares’ Bitcoin Strategy ETF (BITO) took the lead, surpassing GBTC’s trading volume.

According to Bloomberg Intelligence analyst James Seyffart, IBIT had a trading volume of $301 million, while BITO ended the day with $298 million. GBTC came in third with $292 million in trades. Seyffart was quick to point out that BlackRock’s IBIT was the first ETF to trade more than Grayscale’s GBTC in a single day.

⚠️ Important: Total trading that day amounted to only $924 million, the first time ever that daily ETF trades fell below $1 billion since their launch. The cumulative trading volume now stands at $28.30 billion.

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At the time of writing on Feb. 2, GBTC regained its top position with $240.68 million in trading volume.

GBTC Selling Shows Signs of Tapering Off

GBTC’s dominance in spot Bitcoin ETFs was primarily due to heavy outflows from the trust since the first day of trading. Investors were able to redeem their investments once the product was converted to a spot ETF, something that was previously impossible.

Moreover, Grayscale’s high fees have led to over $5.8 billion worth of assets leaving the trust since Jan. 11, as reported by BitMEX Research.

🔗 Spot Bitcoin ETFs add 151K BTC amidst GBTC dump in January

But the dominance of GBTC has recently been on the decline. Previously, GBTC was consistently sending an average of $700 million in BTC to the Coinbase crypto exchange. However, data from BitMEX Research shows that the outflow has reduced to less than $300 million since Jan. 26.

In terms of Bitcoin, 24,050 BTC flowed out of GBTC, which reduced to 4,461 BTC on Jan. 30 and 4,433 BTC on Feb. 2.

According to JPMorgan analysts, GBTC outflows were largely due to profit-taking and are believed to be “behind us.” This could alleviate some selling pressure on BTC’s price.

⚠️ Insight: It’s worth noting that FTX crypto exchange sold its entire GBTC shareholding of 22 million GBTC shares, valued at approximately $1 billion, as GBTC selling peaked.

🤔 Q&A: Additional Topics of Interest

Q1: How does the dominance of GBTC in spot Bitcoin ETFs affect the market?

The dominance of GBTC in spot Bitcoin ETFs indicates the trust’s influence on the market. As investors redeem their investments and GBTC faces outflows, it can lead to a decrease in demand for Bitcoin and potentially impact the price. Moreover, the entrance of other ETFs, like BlackRock’s IBIT and ProShares’ BITO, provides investors with more options and diversification opportunities.

Q2: What are the implications of GBTC outflows on the broader cryptocurrency market?

GBTC outflows suggest that investors might be taking profits and diversifying their holdings into other assets. This can have a short-term impact on the Bitcoin market by potentially reducing buying pressure. However, it is important to consider that the broader cryptocurrency market’s health is not solely dependent on GBTC’s performance. Other factors, such as regulatory developments, institutional adoption, and global economic conditions, also play significant roles.

📈 Future Outlook and Investment Recommendations

Looking ahead, it will be essential to monitor the trends in GBTC trading volume and outflows. If the selling pressure continues to taper off, it could potentially stabilize or even positively impact Bitcoin’s price. Additionally, as more ETFs enter the market, the increased competition and variety of options may provide new investment opportunities for traders and investors.

It is important for investors to stay informed and closely follow market developments and regulatory changes to make well-informed investment decisions.

Reference List:

1. BTC Price at $43K as Smart Money Bets Big on Bitcoin Ahead of Potential BTC ETF Approval
2. Spot Bitcoin ETFs: What to Expect on Day One of Trading
3. Grayscale’s GBTC Moved 100K BTC to Exchange Since Spot Bitcoin ETF Launch
4. Grayscale’s GBTC: Profit-Taking Likely Over, Easing Bitcoin Selling Pressure: JPMorgan

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