Spot bitcoin exchange-traded funds (ETFs) have emerged as the dominant player in the race for investor interest, capturing nearly 90% of the daily trading volume market share for bitcoin exposure ETFs, a report in The Block said. This significant milestone comes just two months after the introduction of spot bitcoin ETFs in the U.S. market.
Bitcoin futures ETFs, which debuted in 2021, now hold a mere 10% market share. This data underscores a clear preference among investors for direct exposure to bitcoin via ETFs rather than products based on futures contracts.
The trading volume for spot bitcoin ETFs has remained consistently strong since their launch on January 11, 2024. The total trading volume for these ETFs has reached a staggering $113.5 billion. BlackRock’s iShares Bitcoin Trust (IBIT), Grayscale’s Bitcoin Investment Trust (GBTC), and Fidelity’s WiseOrigin Bitcoin Trust (FBTC) have been the primary contributors to this volume. Notably, IBIT and FBTC have also witnessed the highest net inflows, further highlighting investor preference for these products.
In contrast, Grayscale’s GBTC has seen a net outflow of over $11 billion so far in 2024, as reported by BitMEX Research data. Analysts at JPMorgan had earlier predicted similar outflows for GBTC, attributing them primarily to its 1.5% annual fee – significantly higher than other spot bitcoin ETFs. The analysts also anticipated a surge in popularity for spot bitcoin ETFs, particularly among retail investors. Additionally, they predicted institutional investors might transition from futures-based ETFs and GBTC towards spot bitcoin ETFs. The current 90% dominance of spot bitcoin ETFs in the daily trading volume market share appears to be a realization of this prediction.
Bitcoin prices experienced a remarkable rise in 2024, and it is currently trading at around $72,150 (as per The Block’s prices page). This price surge is likely due to factors beyond the recent introduction of spot bitcoin ETFs. However, some analysts suggest a potential feedback loop emerging, where the increasing bitcoin price may be driving further inflows into spot bitcoin ETFs. David Lawant, Head of Research at FalconX, commented on this possibility: “While spot ETF inflows were initially driving prices, recently, prices may also be starting to drive inflows to some extent.”
The dominance of spot bitcoin ETFs marks a significant shift in the bitcoin investment landscape. As the market evolves, it will be interesting to see how this trend continues to affect investor behavior and the overall price of bitcoin.
