Retail traders appear to be using a new tool in this massive rally in Bitcoin: exchange-traded funds.
These funds, launched last month, have seen a surge in trading volume this week as Bitcoin continues to rally.
For example, iShares Bitcoin Trust (IBIT) had already seen more than 61 million shares change hands by early Wednesday afternoon, according to FactSet. That’s well above Tuesday’s all-time high of about 43 million shares.
Another multibillion-dollar fund, Fidelity Wise Origin Bitcoin Fund (FBTC), has already bought and sold more than 14 million shares on Wednesday, its first day of trading on January 11. The number of traded shares is on track to exceed 16.8 million shares.
Meanwhile, the ARK 21Shares Bitcoin ETF (ARKB) is already at its third-highest volume ever, just shy of its January 11th figure.
The highly active market around these funds likely indicates that retail traders are using ETFs to participate in the Bitcoin rally. The largest cryptocurrency surpassed the $60,000 level on Wednesday for the first time since November 2021.
ETFs are used by all types of investors, but their high intraday trading indicates that individual traders buy and sell funds in sizable groups.
The trading volume is even more impressive when you consider the price. Bitcoin is up about 30% since the ETF was approved, and the tracking fund’s prices have all risen in the past six weeks, including this week’s big jump.
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Bitcoin ETFs have soared in recent weeks in response to the price of the underlying cryptocurrency.
This price action means many funds will trade at record dollar amounts on Wednesday, even if their stocks are just below the high water mark.
One notable exception to this trend was Grayscale Bitcoin Trust (GBTC), whose trading volume was still far from January levels. The fund has seen billions of dollars in outflows since its inception, with about 22 million shares traded as of around 1 p.m. in New York on Wednesday, less than half the number of shares traded on Jan. 11. Still, this equates to around $1 billion in trading volume.
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