On August 5, the United States saw a significant spike in trading volumes for Bitcoin and Ethereum ETFs, reaching nearly $6 billion as cryptocurrency markets faced a sharp downturn. This surge in activity occurred as Bitcoin’s price dipped below $50,000, triggering heightened trading of crypto-related ETFs.
ETF Trading Volumes Surge
According to CoinGlass data, spot Bitcoin ETFs recorded a daily volume of $5.24 billion, with BlackRock’s iShares Bitcoin Trust (IBIT) contributing over half of this amount. Spot Ether ETFs also saw substantial activity, totaling $715.3 million in trading volume, led by Grayscale’s Ethereum Trust (ETHE) and BlackRock’s iShares Ethereum Trust (ETHA). The combined trading volume for both categories reached $5.96 billion.
Market Reactions and Insights
Bloomberg ETF analyst Eric Balchunas commented on the elevated trading volumes, noting that such “crazy volume” during a market downturn often reflects heightened fear among investors. However, he also highlighted that deep liquidity during volatile periods can be appealing to traders and institutions, as it provides opportunities for long-term investments.
The market volatility on August 4 was attributed to news of Jump Trading transferring hundreds of millions of dollars worth of Ether to exchanges. This event, combined with a significant drop in the Nikkei and the unwinding of the Japanese yen carry trade, led to Bitcoin briefly falling below $50,000 at the start of U.S. trading on August 5. Bitcoin has since recovered slightly, trading above $54,200.
Inflow and Outflow Data
Preliminary inflow data from CoinGlass showed mixed results for Bitcoin and Ether ETFs. The Grayscale Bitcoin Trust and ARK 21Shares Bitcoin ETF (ARKB) experienced outflows of $69 million each. In contrast, the Bitwise Bitcoin ETF (BITB) and the Grayscale Bitcoin Mini Trust (BTC) saw inflows of $2.9 million and $21.8 million, respectively.
For Ethereum, the Grayscale Ethereum Trust experienced outflows of $46.8 million, while Bitwise and Franklin Templeton’s ETFs saw inflows of $7.2 million and $900,000, respectively. Despite the mixed data, Bloomberg ETF analyst James Seyffart predicted that Bitcoin ETFs would end the day with a net inflow once all the data was finalized.
