Bitcoin ETFs hit a four-month high in daily trading volume during Monday’s drop

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

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

BlackRock’s IBIT leads the way with nearly $3 billion

According to DefiLlama data, BlackRock’s IBIT ETF was a major contributor to this volume, generating nearly $3 billion in transactions. The fund also saw its assets under management increase 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 of more than $693 million despite a net outflow of about $148 million, making it the third most traded spot Bitcoin ETF of the day.

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

He noted that for those bullish on Bitcoin, such “crazy volume” during a market crash 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 on August 6. This is a significant drop from the index’s 74 points just a week ago, when Bitcoin was nearing $70,000.

Deep liquidity and long-term stability

However, Balchunas also stressed that while high trading volume on down days may 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 fall in the crypto market began on Friday, triggered by the US jobs report that revealed a weak economy and record unemployment rates. Additionally, the substantial transfer of Ether from Jump Trading to exchanges further contributed to the decline.

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

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