BITO achieved record high trading volume last week, proving there is indeed a market for physically-backed Bitcoin ETFs!

Bloomberg ETF analyst Eric Balchunas posted that the largest Bitcoin ETF, BITO, had a trading volume of $1.7 billion last week, making it the second largest volume since its debut week. Additionally, GBTC saw an increase of $800 million in trading volume last week. Balchunas believes that investing $2.5 billion in these two relatively less ideal products compared to spot ETFs indicates that there is indeed an audience in this market!

Notable: $BITO traded $1.7b last week, 2nd biggest week since its wild WEEK ONE. $GBTC did $800m. That's $2.5b (top 1% among ETFs) into two less desirable methods (vs spot) for exposure = while we think spot ETFs unlikely to set records on DAY ONE, clearly there's an audience pic.twitter.com/6bFYtE0UoR

— Eric Balchunas (@EricBalchunas) October 28, 2023

BITO Hits Second Largest Trading Volume, Reflecting Market Demand

According to a report by CoinGecko in September, in the ranking of the top 12 Bitcoin spot and futures ETFs based on the amount of Bitcoin held, the first place is held by the Bitcoin Strategy ETF BITO launched by ProShares in October 2021.

BITO is the first Bitcoin futures ETF in the U.S. market, listed on the New York Stock Exchange in October 2021, issued by the fund management company ProShares, with a management fee of 0.95%. BITO currently manages assets of approximately $990 million. It tracks the value of Bitcoin through investing in Bitcoin futures on the Chicago Mercantile Exchange (CME).

The Financial Times also used the number of Bitcoin-related emails quoted in Gmail inboxes as a real-time measure, showing that Bitcoin's recent attention has indeed increased.

Buy the rumor, sell the fact?

According to data provided by Balchunas, BITO reached a trading volume of $440 million within the first hour of its listing, surpassing the trading volume on the first day of the "VanEck Vectors Social Sentiment ETF BUZZ" derived from the GameStop (GME) event.

Although Balchunas believes that spot ETFs are unlikely to set records on the first day, as it is no longer the frenzy of 2021! Also, unlike BITO, multiple products are being launched simultaneously this time, so the volume will be dispersed. But he still believes that related demand will be seen.

However, some netizens below wonder if this event will turn out to be another typical case of "Buy the rumor... sell the...".

Balchunas also agrees with this statement.

Note: The investment adage "Buy the rumor, sell the fact." mainly refers to the psychological expectations of investors. When they hear rumors of significant positive or negative news, they jump in first. However, once it becomes a fact, it often leads to a reversal in prices!