$111B: Bitcoin ETFs see Record Inflows in March

Spot bitcoin exchange-traded funds (ETFs) saw their trading volume surge to a record $111 billion in March, nearly triple the $42 billion traded in February.

Approved earlier this year by the SEC, US spot bitcoin ETFs have rapidly gained traction among investors. Their volumes last month exceeded even the most optimistic expectations.

According to Bloomberg ETF analyst Eric Balchunas, March trading volume was around triple that of February and January. The massive rise indicates spot bitcoin ETFs are meeting strong demand from institutional and retail investors.

He stated, “I can’t imagine April will be bigger, but who knows.”

BlackRock’s Bitcoin ETF (IBIT) led the pack, capturing 50% of the total volume. Grayscale’s GBTC took second place with 20%, while Fidelity’s FBTC followed at 17%.

Balchunas declared IBIT the “$GLD of bitcoin,” referring to the mammoth SPDR Gold ETF. He said its March victory makes IBIT the undisputed leader among bitcoin ETFs.

The surge in trading activity aligns with Bitcoin’s climb to new all-time highs in March. However, it also suggests spot ETFs are altering market dynamics and driving new demand.

Critics initially argued bitcoin markets would shrug off the new products. Yet flows into funds like IBIT and FBTC have been overwhelmingly positive.

Demand is vastly outpacing bitcoin mined. ETFs bought around 66,000 BTC in March, while miners only produced 28,500. This supply-demand imbalance seems poised to grow as more investors get exposure through ETFs and newly mined coins get cut in half in two weeks during the bitcoin halving event.

With strong inflows, assets under management, and trading activity, these new regulated instruments have firmly established themselves within Bitcoin markets. If March was any indication, their rise is only just beginning.