Bitcoin ETFs see record-high trading volumes as retail investors jump on crypto rally

Retail traders appear to be using a new tool during this huge rally for bitcoin — exchange-traded funds.

The funds, which launched last month, have seen their trading volume surge this week as bitcoin continues to climb.

For example, the iShares Bitcoin Trust (IBIT) had already seen more than 61 million shares change hands by early afternoon on Wednesday, according to FactSet. That is well above its previous record high of roughly 43 million shares, which came on Tuesday.

Another multibillion dollar fund, the Fidelity Wise Origin Bitcoin Fund (FBTC), already had more than 14 million shares change hands on Wednesday, putting it on track to surpass the 16.8 million traded on Jan. 11, its first day of trading.

Meanwhile, the ARK 21Shares Bitcoin ETF (ARKB) was already at its third-highest trading volume on record, also putting it within striking distance of its Jan. 11 number.

The highly active market around these funds is likely a sign that retail traders are using the ETFs to participate in the bitcoin rally. The largest cryptocurrency crossed the $60,000 mark on Wednesday for the first time since November 2021.

While ETFs are used by all types of investors, the heavy intraday trading suggests that retail traders are a sizable group buying and selling the funds.

The trading volume is even more impressive when considering the price. Bitcoin has risen about 30% since the ETFs were approved, and the tracking funds have all increased in price over the past six weeks, including a big jump this week.

That price movement means that many of the funds will see a record dollar amount traded on Wednesday, even if the share volume comes just short of the high water mark.

One notable exception to the trend was the Grayscale Bitcoin Trust (GBTC), whose trading volume was still far off of its levels from January. The fund, which has seen billions of dollars of outflows since its launch, had about 22 million shares traded as of roughly 1 p.m. in New York on Wednesday, less than half its Jan. 11 number. Still, that translates to about $1 billion in trading volume.

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