Bitcoin ETFs Reached 4-Month High in Daily Trading Volume During Monday’s Crash

Spot Bitcoin (BTC) exchange-traded funds (ETFs) in the United States surpassed $5 billion in daily trading volume on August 5.

This marks the first time since mid-April that such a high volume has been reached.

BlackRock’s IBIT Leads with Nearly $3 Billion

According to DefiLlama data, BlackRock’s IBIT ETF was a major contributor to this volume, generating nearly $3 billion in trades. The fund also saw an increase in its assets under management by $172 million, reflecting strong investor interest.

Fidelity’s FBTC came in second with over $858 million in trading volume, making it one of the most actively traded spot Bitcoin ETFs in the country. Grayscale’s GBTC recorded a trading volume exceeding $693 million despite a net outflow of around $148 million, positioning it as the third most traded spot Bitcoin ETF for the day.

In a post on X on August 5, Bloomberg ETF analyst Eric Balchunas observed that earlier in the trading day, spot Bitcoin ETFs had traded around $2.5 billion, which he says was significant but not overly extreme.

He pointed out that for those who are bullish on Bitcoin, such “crazy volume” during a market downturn is not ideal as “ETF volume on bad days is a pretty reliable measure of fear.”

Meanwhile, the Crypto Fear and Greed Index supports this sentiment, showing an extreme fear reading of 17 out of 100 as of August 6. This is a significant drop from the index’s 74 points just a week ago when Bitcoin was approaching $70,000.

Deep Liquidity and Long-Term Stability

However, Balchunas also emphasized that while high trading volume on down days can indicate fear, it also reflects deep liquidity, which is beneficial for the long-term stability of ETFs. “On the other hand, deep liquidity on bad days is part of what traders and institutions appreciate about ETFs, so seeing volume is also good for the long term,” he added.

The crypto market downturn began on Friday, triggered by the U.S. job report revealing a weak economy and record-setting unemployment rates. Additionally, Jump Trading’s substantial transfer of Ether to exchanges further contributed to the decline.

This caused Bitcoin to briefly dip below $50,000 at the start of U.S. trading hours. However, BTC has since recovered slightly and is currently trading around $55,000.

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