U.S. Spot Bitcoin ETFs Pass $500 Billion in Trading Volume

In a landmark achievement for the crypto and asset management industries, U.S. spot bitcoin exchange-traded funds (ETFs) crossed the half-a-trillion-dollar mark in cumulative trading volume on Wednesday. Less than a year since their January launch, these ETFs have attracted unprecedented interest from institutional and retail investors alike, fueled by Bitcoin’s price rally and a shifting regulatory landscape.

The momentum in trading volumes has been nothing short of remarkable. Spot Bitcoin ETFs reached $100 billion in trading volume by March and doubled to $200 billion by April as Bitcoin’s price surged to a record-breaking $74,000. After a slower period where Bitcoin consolidated between $50,000 and $70,000, interest renewed as pro-crypto candidate Donald Trump won the U.S. presidential election on Nov. 6, spurring fresh market activity.

A Milestone for Bitcoin ETFs

As of the close of trading on Wednesday, cumulative trading volume for U.S. spot Bitcoin ETFs stood at $505.4 billion, according to The Block’s data dashboard. In addition to marking a key milestone, these ETFs are now competing with some of the world’s largest traditional ETFs, such as the Vanguard S&P 500 ETF (VOO) and Invesco’s QQQ Trust, demonstrating crypto’s entrance into mainstream financial markets.

Wednesday alone saw a combined $7.9 billion in trading volume across U.S. Bitcoin ETFs—the fourth-largest trading day since their inception. BlackRock’s IBIT spot Bitcoin ETF took the lead, setting a record with $5.2 billion in trading volume, followed by Fidelity’s FBTC and Grayscale’s GBTC, which reported $1.2 billion and $670 million, respectively. Bloomberg Senior ETF analyst Eric Balchunas noted, “I thought things were cooling off, but no, IBIT just saw $5 billion in volume today for the first time ever,” emphasizing its rising market influence.

Bitcoin ETFs’ Growing Market Share

BlackRock’s IBIT has gradually dominated the Bitcoin ETF market, with its share of trading volume surging from 15% in January to an impressive 67% as of Wednesday. Grayscale’s GBTC initially led the market after its conversion from a trust fund but has since been overtaken by newer players with more competitive structures.

U.S. spot Ethereum ETFs, which launched in July, have also seen growth, albeit at a slower pace. These funds generated $702 million in trading on Wednesday, taking their cumulative volume to $22.3 billion. Despite initial outflows, particularly from Grayscale’s converted ETHE fund, net inflows have picked up in recent weeks, driven largely by investor interest in the Ethereum ecosystem.

Inflows and Assets Under Management Surge Post-Election

Alongside the trading volume surge, U.S. spot Bitcoin ETFs have also experienced significant net inflows. On Wednesday, the funds saw $510.1 million in net inflows, pushing this week’s total to $2.4 billion. BlackRock’s IBIT led with $230.8 million, followed by Fidelity’s FBTC and Grayscale’s BTC+ with $186.1 million and $61.3 million, respectively. Following six straight days of inflows since Trump’s victory, total net inflows for U.S. spot Bitcoin ETFs have now reached $28.3 billion since January.

Assets under management (AUM) for U.S. spot Bitcoin ETFs have also risen in response to growing inflows and Bitcoin’s price rally. Combined, these ETFs now account for roughly $89 billion in AUM, with BlackRock’s IBIT topping the list at $41.1 billion. Balchunas highlighted IBIT’s unprecedented growth, stating, “It’s now in the top 1% of all ETFs by assets and at 10 months old, it’s bigger than all 2,800 ETFs launched in the past ten years.”

Ethereum ETFs and a Broader Crypto Market Rally

Ethereum ETFs in the U.S. also recorded significant inflows on Wednesday, totaling $146.9 million. Fidelity’s FETH led with $101.7 million, followed by BlackRock’s ETHA with $35.6 million. With $578.3 million in weekly inflows, U.S. spot Ethereum ETFs have continued to gain traction post-election, reaching $796.2 million since the results were announced.

Bitcoin’s current price surge—trading at $90,738 and peaking above $93,000 on Wednesday—has further bolstered the crypto market. The Global Market Crypto Index (GMCI) 30, representing the top 30 cryptocurrencies, is up nearly 5% over the past day to 163.57, adding to a 22% gain over the past week and around 65% in 2024.

As the crypto and traditional financial sectors continue to intersect, industry experts are optimistic about the potential for ETFs to bring crypto into the mainstream. Nate Geraci, president of The ETF Store, remarked, “Involves the largest asset managers, politicians, regulators, everyone. ETFs are simply a bridge for mainstream access to crypto. Once that bridge is fully built, there’s no going back.”