Bitcoin Rebounds to $55,700 with Significant Inflows into ETFs

On August 5, amidst a turbulent market, U.S. Bitcoin and Ether ETFs witnessed trading volumes nearing $6 billion. According to CoinGlass data, these ETFs saw a daily trading volume totaling $5.24 billion, with over half attributed to BlackRock’s iShares Bitcoin Trust (IBIT). The ETFs recorded trading volumes of $715.3 million, primarily driven by Grayscale’s Ethereum Trust (ETHE) and BlackRock’s iShares Ethereum Trust (ETHA). The combined volume for the two spot cryptocurrency ETFs reached $5.96 billion.

In a post on X earlier in the trading day, a Bloomberg ETF analyst cautioned that “frenzied volume” during market downturns is often a “fairly reliable measure of fear.” He further elaborated, “On the other hand, deep liquidity on bad days is one reason traders and institutions favor ETFs, so seeing high trading volumes is also positive for the long term.”

Bitcoin ETFs have traded about $2.5b so far, a lot for 10:45am, but not too crazy (full history below). If you bitcoin bull you actually DONT want to see crazy volume today as ETF volume on bad days is a pretty reliable measure of fear. On flip, deep liquidity on bad days is part… pic.twitter.com/TOQRjyriqp

— Eric Balchunas (@EricBalchunas) August 5, 2024

The cryptocurrency market began its decline on August 4 following news that Jump Trading moved hundreds of millions of Ether to exchanges. The price drop intensified the next day after a sharp decline in the Nikkei and the unwinding of yen carry trades, with Bitcoin falling below $50,000 at the start of U.S. trading on August 5. Bitcoin then saw a slight recovery and is currently trading at $54,288, according to CoinMarketCap.

Preliminary Inflow Data

Preliminary daily inflow data from CoinGlass, ahead of final statistics, shows mixed results among Bitcoin and Ether ETFs. Both Grayscale Bitcoin Trust and ARK 21Shares Bitcoin ETF (ARKB) reported outflows of $69 million for the day, while Bitwise Bitcoin ETF (BITB) and Grayscale Bitcoin Mini Trust (BTC) saw inflows of $2.9 million and $21.8 million, respectively.

Meanwhile, Grayscale Ethereum Trust experienced outflows of $46.8 million, whereas Bitwise and Franklin Templeton’s ETFs saw inflows of $7.2 million and $900,000, respectively.

I’m gonna guess that we see net inflows into the #Bitcoin ETFs when all the data is in tonight. https://t.co/2YRhmvatQL

— James Seyffart (@JSeyff) August 5, 2024

However, in a post on X on August 5, Bloomberg ETF analyst James Seyffart predicted that Bitcoin ETFs would report net inflows once all data is finalized.