Will Bitcoin Propel ETF Trading Beyond $38 Trillion in 2024?

2023 witnessed $38 trillion in ETF trades, reported Bloomberg’s senior ETF analyst Eric Balchunas. This was derived from $8 trillion in assets, ranking the year as the second-highest in ETF trading activity.

Also Read: Bitcoin Price: Bitcoin Whales Move 12K BTC Amid Hope Of Spot ETF Early Nod

Despite the heavy trading in 2023, 2022 held the top spot in activity. The previous year’s record-breaking performance is attributed to increased ETF trading activity during market downturns, as the stocks are not performing well.

Balchunas also highlighted that the recent ETF trends indicate a new norm of overall yearly volumes consistently exceeding $30 trillion. This surge is fueled by greater participation from institutional investors, a growing number of ETF offerings, and the decreasing value of the dollar, he added.

However, the question that arises is: how will potential Bitcoin ETFs impact the overall trading activity in 2024? 

Bitcoin’s large market awaits

December 29 marked a crucial US SEC deadline as all Bitcoin ETF applicants rushed to amend their S-1 documents.

Notable applicants like BlackRock and Valkyrie were among those who updated their submissions on Friday to become official ETF contenders with players like Grayscale and VanEck. With the Securities and Exchange Commission (SEC) expected to decide on most of these filings in January 2024, the anticipation for a spot Bitcoin ETF approval has been high.

Bitcoin advocate Vijay Boyapati underlined in the past that Bitcoin ETFs could unlock substantial retail capital. Yet, opinions have been divided among analysts regarding the potential impact of a Bitcoin ETF launch. Critics have debated that it might result in a “sell-the-news” scenario rather than significant inflows. However, the involvement of heavyweights like BlackRock could transform the spot Bitcoin ETF market. Bloomberg Intelligence reported that wealthy client inquiries signal that the market could reach an estimated $100 billion.

Bitcoin derivative trading sets records

Not to mention that 2023 also saw a remarkable interest in digital-asset derivatives. Reports find that traditional institutional investors have increased their engagement in crypto options and futures, especially in anticipation of the ETF decision. Meanwhile, Bitcoin options trading volume hit an all-time high, as per data from The Block.

Amidst these developments, the overall cryptocurrency market cap stands at approximately $1.72 trillion, showing some weakness in the last 24 hours. Bitcoin (BTC) is currently priced under $42,000, based on CoinGecko figures. The king coin’s overall market cap is nearing $822 billion.

Ethereum (ETH) follows, priced at about $2,286, with a market cap of roughly $275 billion. Tether (USDT) maintains its peg at $1.00, with a market cap of around $91 billion. This signifies a massive market waiting to enter the ETF segment.

Also Read: VanEck Updates Spot Bitcoin ETF Filing With US SEC
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