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Record-Breaking Day for Bitcoin ETFs with $7.7 Billion in Trading Volume

Unprecedented trading volume hits the spot Bitcoin ETF market

Trading volumes for the ten newly introduced U.S. Bitcoin exchange-traded funds (ETFs) shattered previous records, reaching a staggering $7.69 billion on February 28. This surge more than doubled their prior record, emphasizing the growing investor interest in cryptocurrency through regulated financial instruments. 

According to James Seyffart:

“The new record for #Bitcoin ETF trading volume is officially $7.69 billion. Previous record was $4.66 billion from launch day.”

The BlackRock iShares Bitcoin ETF, known as IBIT, was at the forefront of this trading frenzy, accounting for 43.5% of the total volume with $3.35 billion in trades. This not only doubled IBIT's previous daily record but also spotlighted the ETF as a dominant player in the crypto financial market. 

Leading players and market response

Grayscale Bitcoin Trust (GBTC) and Fidelity Wise Origin Bitcoin Fund (FBTC) were significant players, with trading volumes of $1.86 billion and $1.44 billion, respectively. These figures not only showcase the funds' vital roles in the market but also mark a doubling of FBTC's previous volume record. Together, GBTC and FBTC comprised approximately 43% of the day's total trading volume, underlining the concentrated interest in these funds.

Eric Balchunas, a Bloomberg analyst, noted the rapid pace at which the nine new ETFs, excluding Grayscale's, surpassed their previous records. 

He reported:

"It took only half the trading day for... to blow past their previous record," 

By the close of trading, these ETFs had doubled their previous volume record, with Balchunas commenting on the remarkable number of trades: 

"The total number of trades was double too, over half a million individual trades [between] them."

Market makers attributed this surge largely to "natural demand" rather than algorithmic or arbitrage trading, suggesting a genuine investor interest in Bitcoin ETFs. This activity coincided with Bitcoin's price rally, soaring over 10% to an over two-year high of $64,000, before retracing slightly. The day's trading concluded with Bitcoin above $62,000, demonstrating the market's resilience and optimism.

Meanwhile, GBTC experienced $216.4 million in net outflows on February 28, marking its highest outflow day for the month.