As Volatility Increases in BTC Price, Spot Bitcoin ETF Volumes Hit a New Record!

• Bitcoin ETFs continue to maintain market dominance with remarkable trading volumes despite the volatility in Bitcoin (BTC) prices on Tuesday.
• According to Bloomberg ETF strategist Eric Balchunas, the increase in trading activity is not surprising given the natural volatility associated with ETFs.
• The ProShares Short Bitcoin Strategy ETF, $BITI, significantly surpassed its previous record, which is understandable as it is considered a short-term Bitcoin ETF.

After the rally in the Bitcoin price gained momentum, the trading volumes of spot Bitcoin ETFs broke a new record: Current reports!

Spot Bitcoin ETF Volumes Reach $10 Billion

Bitcoin ETFs continue to dominate the market with remarkable trading volumes despite the volatility in Bitcoin (BTC) prices on Tuesday, March 6th. On Tuesday, March 5th, the total trading volume of all ten Bitcoin ETFs surpassed a striking $10 billion. Despite being in operation for less than two months, these ETFs have garnered significant trading volumes, especially considering the massive volatility in BTC prices, ranging between $69,000 and $59,000.

According to Bloomberg ETF strategist Eric Balchunas, the increase in trading activity is not surprising given the natural volatility associated with ETFs. However, the magnitude of today’s trading figures is remarkable, especially for ETFs that have been operational for less than two months.

Several ETFs such as $IBIT, $FBTC, $BITB, and $ARKB have experienced record-breaking trading days, indicating an increasing investor interest in cryptocurrency-based exchange-traded products. In fact, BlackRock’s IBIT Bitcoin ETF recorded an astonishing $788 million in daily inflows, marking the highest daily inflow of all time. Fidelity’s FBTC ranked second with a net inflow of $125 million, according to Farside Investors’ data.

The ProShares Short Bitcoin Strategy ETF, $BITI, significantly surpassed its previous record, which is understandable as it is considered a short-term Bitcoin ETF. Balchunas highlighted the potential launch of ETFs that are 2x and -2x of spot BTC ETFs due to strong demand from traders. Additionally, both $BITO and $BITX broke their previous volume records, emphasizing the unexpected impact of the current interest in spot Bitcoin trading on futures ETFs.

The combined assets of 10 spot BTC ETFs surpassed a significant milestone, exceeding $50 billion. These ETFs started with assets below $30 billion just seven weeks ago. Approximately $8 billion of the total increase is attributed to inflows, while the remaining growth is due to the increase in the value of Bitcoin. Eric Balchunas noted that both Bitcoin and ETFs have been mutually beneficial.

BTC Profit-Taking

While Bitcoin ETFs continue to reach new milestones, there is strong profit-taking, especially from long-term Bitcoin holders, including miners. The price fluctuations on Tuesday demonstrated the unpredictable nature of Bitcoin characterized by rapid rises and falls.

Optimistic speculation in the derivatives market fueled further BTC gains, allowing investors to significantly leverage their positions using products like perpetual futures options.

However, as reported by crypto data tracker Coinglass, with Bitcoin’s trajectory changing, bullish positions worth over $800 million faced rapid liquidation in the perpetual futures market.