Bitcoin‘s price has risen above $54,900, and the market continues to be active. Amidst these developments, a NYDIG report provides a different perspective. It was noted that although high transaction volumes in new spot Bitcoin ETFs are generally thought to indicate strong investor buying interest, this may not always be the case.
What Does the Spot Bitcoin ETF Report Indicate?
Greg Cipolaro, the Global Head of Research at NYDIG, stated in an article published on Friday:
Daily trading volume is not a reliable indicator of daily fund flows, which is a common misconception in the industry.
For instance, Cipolaro seems to have a different perspective on the matter. He suggests that it’s not incorrect to consider Grayscale’s Bitcoin Trust (GBTC) among the top ten Bitcoin ETFs as a prime investment.
According to Cipolaro, since the launch of spot ETFs on January 11, GBTC has consistently attracted attention with daily trading volumes exceeding a total of $20 billion.
Despite all this, Grayscale funds have also lost over $7 billion in assets. This is seen as the clearest indicator of the low correlation between the emerging volumes and inflows.
Current Status of Bitcoin ETFs
On the other hand, BlackRock’s popular ETF, the iShares Bitcoin Trust (IBIT), has only managed to reach about $13 billion, just over half of GBTC’s volume, but its AUM has risen from $0 to approximately $7 billion.
Cipolaro appears to be paying attention to a fund’s turnover rate. In this context, he also considers the division of the dollar-denominated trading volume by the fund’s net asset value. He added the following to his comments:
This rate shows the proportion of assets traded on any given day, giving an idea of investor and trader profiles and potentially what motivates their investment choices.
Cipolaro noted that when considering spot Bitcoin ETFs as a whole, he observed a turnover rate of 5.3%, with Valkyrie (BRRR) and Grayscale’s GBTC having the lowest rates at 2.2% and 2.4%, respectively.
At the top of the list is Ark 21 (ARKB) with a turnover rate of 11.3%. Cipolaro also mentioned that WisdomTree (BTCW), the smallest of the spot ETFs with about $30 million AUM, had a turnover rate of 205% over a five-day period.
