On August 6, the trading volume of Bitcoin exchange-traded funds (ETFs) increased significantly to $5.7 billion, due to increased volatility in the cryptocurrency markets.
Simultaneously, Bitcoin’s price has decreased by 8% since August 4, while Ethereum has witnessed a significant 21% reduction due to the selling of hundreds of millions of dollars worth of ETH by prominent funds such as Jump Trading and Paradigm.
The trading volume of Bitcoin ETF surpassed $1.3 billion within just 20 minutes of the market opening. The iShares Bitcoin Trust dominated the trading activity, accounting for over $1.27 billion in volume.
The prices of Bitcoin and Ethereum are recovering after reaching their lowest points in six months on Monday. Bitcoin fell below $50,000, while Ethereum had its biggest one-day decline in three years. Analysts assert that the sell-off was intensified by wider macroeconomic apprehensions, such as feeble US employment data and volatility in various asset categories.
According to JPMorgan Chase researchers, the trading volumes of spot Bitcoin ETFs increased by more than two times on Monday, reaching over $5.2 billion, which is higher than the trading volumes observed during the initial launch in January.
Ethereum ETFs experienced inflows above $49 million across all funds. Bernstein analysts predict a rise in the allocation of assets to Bitcoin as more wirehouses authorize the usage of these products in the upcoming months.
The increase in Bitcoin ETF trading volume indicates that certain investors perceived the decline in price as a chance to purchase; nevertheless, the stability of the market is still delicate, and numerous investors still need to sell their holdings and reduce the leverage in their portfolios.
The increase in Bitcoin ETF volume emphasizes the swift movement of institutional capital into and out of crypto markets during times of instability.
