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In a striking testament to Bitcoin’s rising popularity, BlackRock’s iShares Bitcoin Trust ETF (IBIT) has shattered expectations this week. The digital product investment has recorded a staggering $1 billion in trading volume within just 20 minutes on Wednesday.
ETF analyst Eric Balchunas highlighted this extraordinary surge, pointing out that the trading volume for IBIT is on track to set new records. This comes as Bitcoin itself reaches historic price levels.
Bitcoin ETF Volume Defies Conventional Patterns
Typically, ETF trading volumes tend to spike during large sell-offs as investors seek to exit their positions. However, IBIT is defying this trend, witnessing a trading volume explosion alongside Bitcoin’s price rally rather than during a downturn.
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Balchunas described the current surge as a “feeding frenzy” fueled by Bitcoin’s rapid price increase. He said this has ignited intense interest from both retail and institutional investors.
This aligns with patterns seen last month when IBIT recorded a high of $3.5 billion in Bitcoin trading, which led to $1.8 billion in net inflows in just a few days. With trading volumes spiking once again, Balchunas believes a similar wave of inflows may follow.
BlackRock’s IBIT is not the only ETF seeing heightened interest; other Bitcoin ETFs have joined the rally. These ETFs offer a regulated alternative for traditional investors who may be cautious of direct crypto exposure.
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Balchunas pointed out that the recent volume spike suggests fresh capital is entering through these ETFs rather than just funds recycling from crypto exchanges. This shift indicates that these digital investment classes are drawing in new investors who prefer a mainstream, secure entry into the digital asset market.
U.S. Investors Spark Bitcoin’s Rally with Renewed Demand
Another critical element supporting the ETF surge is the return of the “Coinbase premium.” For the first time in five weeks, the price of Bitcoin on Coinbase has risen above prices on other exchanges. This shows that U.S.-based investors are actively driving up demand.
The Coinbase premium signals increased buying interest in the U.S., where regulatory clarity and platforms like Coinbase make Bitcoin more accessible. This trend highlights the growing involvement of mainstream investors in the crypto market.
What’s Next for Bitcoin ETFs?
As Bitcoin continues to rise, the potential for record-breaking inflows into IBIT and other Bitcoin ETFs grows increasingly likely. Balchunas observes that sustained high trading volume at these levels could trigger another surge in inflows, strengthening ETFs’ role in the Bitcoin rally.
With growing interest from both institutional and retail investors, Bitcoin ETFs are poised to become key players in the market. As this trading rush continues, experts closely watch whether it marks the start of greater institutional involvement in crypto through ETFs.
