Bitcoin ETF Trading Volume Surges 50 Percentage Amid Price Drop Below $100K, While Ether ETFs Set Record Inflows

In a remarkable development for the cryptocurrency markets, U.S. spot Bitcoin exchange-traded funds (ETFs) recorded a substantial $7.1 billion in trading volume on December 5, marking a 50% surge from the previous day. This spike in trading volume coincided with a sharp decline in Bitcoin’s price, which fell below the critical $100,000 mark for the first time in over a week.

Bitcoin ETFs See Massive Trading Surge and Strong Inflows

The surge in Bitcoin ETF trading volume comes as Bitcoin’s price dropped by more than 10%, from a record high of $103,607 on December 5 to an intraday low of $92,980 on December 6, before slightly recovering to around $98,000. Despite the price drop, Bitcoin ETFs have seen massive inflows, signaling strong investor interest in the asset, even amid market volatility.

According to data from SoSoValue, the 12 U.S.-listed spot Bitcoin ETFs experienced net inflows of $766.66 million on December 5, extending a six-day streak of positive flows. This brought the total inflows for the past six days to over $2.7 billion, underlining the growing demand for Bitcoin exposure through ETFs.

BlackRock’s iShares Bitcoin Trust (IBIT) led the charge, with $770.51 million in inflows, marking its fifth consecutive day as the top performer in the Bitcoin ETF space. Other notable contributors to the inflows included Grayscale Bitcoin Mini Trust, which saw $95.35 million in inflows, and Fidelity’s FBTC with $47.47 million. ARK and 21Shares’ ARKB ETF contributed more modestly with $12.32 million in inflows.

While most Bitcoin ETFs enjoyed inflows, not all followed the same trend. Grayscale’s Bitcoin Trust (GBTC) and Bitwise’s BITB recorded outflows of $148.78 million and $10.22 million, respectively. The remaining Bitcoin ETFs saw little to no activity on the day, indicating mixed investor sentiment across different Bitcoin-focused funds.

Despite the dip in Bitcoin’s price, the total trading volume for Bitcoin ETFs saw a significant jump to $7.1 billion—more than 50% higher than the $4.71 billion recorded the previous day. This surge is seen as a sign that institutional and retail investors are seizing the opportunity to buy into Bitcoin at a lower price, confident in its long-term potential despite short-term market fluctuations.

Bitcoin’s Price Drop: A Temporary Setback?

The sudden drop in Bitcoin’s price on December 5 has sparked widespread discussions about its price trajectory. The flagship cryptocurrency fell below $100,000, a key psychological level for investors, dropping by over $10,000 in just a matter of hours. However, Bitcoin has since staged a slight recovery, trading around $98,000 as of press time, marking a 4% decline over the past 24 hours.

Despite the short-term price correction, Bitcoin’s strong performance over the past year has continued to attract institutional investment, with many seeing the price drop as a temporary setback rather than a significant change in the asset’s long-term outlook. The increased trading volume in Bitcoin ETFs, especially amid the price drop, is an indication of investors' belief in Bitcoin’s resilience and potential for future growth.

Ether ETFs Break Records with Historic Inflows

Meanwhile, Ether ETFs are also experiencing historic inflows, with U.S.-listed spot Ether ETFs recording a record-breaking $428.44 million in inflows on December 5. This represents the largest single-day inflow since Ether ETFs were launched on July 23, surpassing the previous record of $333.92 million set just a week earlier on November 29.

The strong inflows into Ether ETFs reflect the growing investor confidence in Ethereum, especially as the cryptocurrency has experienced an impressive rally in recent weeks. Over the past two weeks, Ether ETFs have posted nine consecutive days of net positive inflows, totaling over $1.3 billion. This is a significant achievement, considering the volatility in the broader cryptocurrency market.

BlackRock’s ETHA ETF has been the dominant player, amassing a record $292.69 million in inflows on December 5. With a total of $2.64 billion in inflows, ETHA continues to be a major player in the Ethereum ETF space. Other key contributors include Fidelity’s FETH, which saw $113.61 million in inflows, and Grayscale’s Ethereum Mini Trust, with $30.69 million. Bitwise’s ETHW added another $6.58 million to the total.

Despite the overwhelming inflows, Grayscale’s Ethereum Trust (ETHE) saw a slight outflow of $15.12 million, suggesting a mixed reception among investors for different types of Ethereum-focused funds.

Ether’s Price Rally: What’s Driving the Momentum?

Ether’s impressive performance is reflected in its recent price rally. On December 5, the cryptocurrency reached an eight-month high of $3,946, marking a 14.5% gain over the past two weeks. This surge in price has been driven by several factors, including the ongoing developments in Ethereum’s network upgrades and the broader market’s growing interest in Ethereum as a strong alternative to Bitcoin.

At press time, Ether was trading at $3,880, maintaining its strong position as the second-largest cryptocurrency by market capitalization. The surge in Ether ETF inflows is seen as a direct result of the cryptocurrency’s bullish price action and increasing investor confidence in its long-term value.

Conclusion: A Sign of Strength for Bitcoin and Ether

The significant increase in trading volume and inflows for both Bitcoin and Ether ETFs signals growing investor optimism in the crypto markets. Despite Bitcoin’s recent price drop, the surge in ETF trading volume highlights the continued demand for exposure to the flagship cryptocurrency. Similarly, Ether’s historic inflows reflect the growing interest in Ethereum, with investors increasingly seeking to gain exposure to the second-largest cryptocurrency.

As both Bitcoin and Ether continue to capture the attention of institutional and retail investors alike, the trend of rising ETF inflows could signal the maturation of the cryptocurrency market, with ETFs offering a more traditional and secure method for exposure to digital assets. With strong institutional support and record-breaking inflows, the outlook for both Bitcoin and Ether remains positive as the market moves into the final weeks of 2024.