After record crypto product inflow week, bitcoin ETF volumes spike

Following a record inflow week for crypto investment products, several US spot bitcoin ETFs saw all-time high volumes on Tuesday.   

The sustained demand for spot bitcoin ETFs has been “something to witness,” Bitwise Chief Investment Officer Matt Hougan said during a Tuesday X Space.

Investors traded a record 6.3 million shares — worth roughly $179 million — of the Bitwise Bitcoin ETF (BITB) on Tuesday, according to Yahoo Finance data.

Bitcoin ETFs by VanEck and WisdomTree saw even bigger spikes in volume after the holiday weekend. 

The VanEck Bitcoin Trust ETF (HODL) saw its trading volume reach 6.8 million shares, or $400 million, on Tuesday. The volumes (in dollar value) were about 16 times greater than the ETF saw on Jan. 11, its first day of trading.

WisdomTree’s Bitcoin Fund (BTCW) saw a similar surge, as its trading volumes eclipsed 4 million shares, or about $220 million — about 20 times its average daily volume.

Overall, US spot bitcoin ETFs — excluding the Grayscale Bitcoin Trust ETF ( GBTC ) — saw about $2 billion in trading volumes. That was their biggest trading volume since their first day on the market, according to Bloomberg Intelligence analyst Eric Balchunas.

The high volumes came after inflows into crypto investment products hit a record $2.45 billion last week, according to CoinShares data . The total was more than double the inflows seen the week prior .

The spot bitcoin ETFs issued by BlackRock and Fidelity led the way, with the iShares Bitcoin Trust (IBIT) and the Fidelity Wise Origin Bitcoin Fund (FBTC) notching inflows of roughly $1.6 billion and $650 million last week, respectively.

“It feels to me like the initial successes were enough to intrigue some people,” Balchunas said during the X Space with Hougan. “Week five…just seemed unnatural and part of a second wind, which you rarely see.”

Hougan said the cadence and size of “sales wins” for BITB from professional investors has dramatically increased in the last two weeks as bitcoin’s price has rallied .

“I think part of it was advisors, RIAs and family offices who wanted to allocate…saw these come on the market, watched them for a month, did their due diligence and now they’re moving into the space,” he said.

Hougan, when discussing the Tuesday volume spikes for the VanEck and WisdomTree products, said it’s possible those funds were also added to model portfolios. 

Ed Lopez, VanEck ’s head of ETF product, told Blockworks in an email that it can be challenging to know who or why someone buys an ETF.

“We’ve publicly filed to lower HODL’s fee, and we have seen strong interest in our fund and bitcoin ETFs broadly, including great engagement from retail investors,” he added.

A WisdomTree spokesperson declined to comment.  

The US spot bitcoin ETFs — at about $5 billion of net inflows in five trading weeks — are currently on pace to easily beat Bloomberg Intelligence’s year-one net inflow estimate of between $10 billion and $15 billion.

“I don’t think they’re going to shatter that; I think they will calm down a little bit,” Balchunas said. “But who knows? Seeing HODL and BTCW…wake up today, if they start punching above their way, look out.”