How Spot Bitcoin ETFs are Performing Across Exchanges

In January 2024, 10 spot Bitcoin ETFs launched in the U.S. after receiving approval from the Securities and Exchange Commission (SEC). It has been nearly a decade since the first spot Bitcoin ETF was filed and numerous milestones have been achieved along the way to get to this point. In late February 2021, Purpose Investments listed the world’s first spot Bitcoin ETF in Canada. Eight months later, the first U.S. Bitcoin futures-based ETF was listed and gathered $1 billion in assets in just two days. In 2022, Global X and 21Shares partnered to list the first Australia Bitcoin ETF on Cboe. Europe followed suit in 2023, listing its first spot Bitcoin ETF from Jacobi Asset Management. After more than 20 U.S. exchange rule filings had been disapproved since 2017, 10 spot Bitcoin ETF filings received SEC approval in January 2024. Of those 10 spot Bitcoin ETF filings, six were filed by Cboe as the primary listing exchange.

¹ Assets under management (AUM) as of March 8, 2024

U.S. spot Bitcoin ETFs brought in a total of $9.6 billion in net fund flows since inception, as seen in Figure 1. The only four ETFs to bring in more than $1 billion in net flows were IBIT, FBTC, ARKB, and BITB. IBIT pulled in $10 billion, FBTC pulled in $6.2 billion, ARKB pulled in $1.8 billion, and BITB pulled in $1.4 billion. BRRR rounded out the top five ETFs and gathered $262 million in flows. GBTC was the only ETF to see net outflows. It had over $10.6 billion in net outflows since January 11, 2024.

ETF Trading Activity

Since their debut in January, total traded volume for ETFs tracking spot Bitcoin averaged 2.8% of total U.S. ETF volume. In comparison, SQQQ, the top symbol in this category, averaged 5.7% of total U.S. ETF volume over the same period. These listings reached a peak 8.4% of total U.S. ETF volume on February 28, 2024.

U.S. spot Bitcoin ETFs traded 2.7 billion shares across all exchanges between January 11 and March 8, 2024. The 10 products had a combined average daily volume (ADV) of 68 million shares. The Bitcoin ETF with the highest ADV was iShares Bitcoin Trust, IBIT, at 28.63 million shares, followed by Grayscale Bitcoin Trust, GBTC, (19.98 million shares), Fidelity Wise Origin Bitcoin Fund, FBTC, (11.22 million shares), Bitwise Bitcoin ETF, BITB, (3.11 million shares), and ARK 21Shares Bitcoin ETF, ARKB, (2.94 million shares). The remaining ETFs had an ADV of less than 705,000 shares per ETF.

During the same time frame, U.S. spot Bitcoin ETFs reached a combined total of 35 million shares in auction volume, as shown in Figure 3. Over 1 million shares in auction volume traded on each of the first three days. Since then, the Bitcoin ETFs had twelve trading sessions that collectively exceeded 1 million shares in auction volume.

The total auction volume of U.S. spot Bitcoin ETFs has primarily been in three products, IBIT, GBTC, and FBTC. IBIT had an average daily auction volume (ADAV) of 452,920 shares, followed by GBTC with an ADAV of 207,720 shares, and lastly FBTC with an ADAV of 113,392 shares.

Comparing each U.S. spot Bitcoin ETFs ADAV to the rest of the U.S. ETF universe, that includes over 3,300 listed ETFs, from January 11 to March 8, 2024, 5 U.S. spot Bitcoin ETFs were above the 94 percentile – 200 symbols had an ADAV greater than 36,339 shares. Furthermore, three of those five ETFs were above the 97 percentile – 88 symbols had an ADAV greater than 113,391.

Like auction volumes, most of the total volume was in IBIT, GBTC, and FBTC. As shown in Figure 4, IBIT averaged 42.1% of U.S. spot Bitcoin ETFs total volume and overtook GBTC on February 26, 2024. Afterwards, IBIT’s market share was above 50%. GBTC averaged 29.4% of U.S. spot Bitcoin ETFs total volume and has been decreasing in market share. On February 12, 2024, GBTC had its lowest market share at 16.6%. Conversely, on the same trading day, IBIT had its second largest market share day of 55.3%. FBTC averaged 16.5% and its best trading day for this metric was March 6, 2024, with 20.9% market share. Also, on February 20, 2024, BITB and HODL had 10.8% and 10% market share of U.S. spot Bitcoin ETFs total volume, respectively. The first time any ETF other than IBIT, GBTC, and FBTC had double digit market share on a single trading day.

Retail Participation

Retail participation in total ETF volume across each of Cboe’s U.S. equity exchanges saw a month-over-month (MoM) increase of 5.3%. Over the last three years, the highest amount of U.S. ETF retail participation was in February 2023 at 8.2%.

The bottom panel in Figure 5 compares ETF and corporate retail volume across Cboe’s U.S. equity exchanges. ETF retail percentage increased 4.7% MoM. ETF retail percentage reached its high in October 2022 at 22.2%.

Below, in Figure 6, U.S. spot Bitcoin ETFs total retail volume traded on Cboe’s exchanges increased 164.6% from the week of February 23 to the week of March 1, 2024. In total, 47.1 million retail shares have traded since January 11, 2024. The three ETFs with the largest amount of total retail volume across Cboe’s exchanges were IBIT with 19.9 million shares, GBTC with 10.8 million shares, and FBTC with 9.9 million shares.

Market Share at Exchange Level

Trade Reporting Facility (TRF) total volume market share in U.S. spot Bitcoin ETFs decreased 18.4% between January 11 and March 8, 2024. As seen in Figure 7 below, TRF gained 14% market share between inception and January 17, 2024, lost 24.2% market share until January 22, resumed a 11.6% uptick, and then in the remaining trading sessions lost 19.8% market share.

Looking further at the relationship between TRF’s flows and On-Exchange flows we see that during positive flows, TRF’s average gain in market share was 3.36%, while its average loss in market share was 6.61% during negative flows.

NBBO Spreads

For the first 40 trading days, across all U.S. spot Bitcoin ETFs, the average National Best Bid and Offer (NBBO) spread was 8.6 basis points (bps). Since listing, there’s been an inverse relationship between spread and ADV, as shown in Figure 8 which depicts a spread range of 2.8 bps – 14.4 bps. The tightest average NBBO spreads were in GBTC at 2.8 bps, FBTC at 3.1 bps, and IBIT at 4 bps.

Figure 9 shows the daily average NBBO spread for the U.S. spot Bitcoin ETFs. Since inception, the NBBO spread has significantly decreased. When looking at the percentage change of average NBBO spreads between January 11 and March 8, 2024, spreads decreased by 72%.

Ultimately, after a short decline, trading volumes in U.S. spot Bitcoin ETFs started to pick back up in February. Competition between On-Exchange and Off-Exchange trading market share started off strong, but recently On-Exchange venues have taken most of the volume. On-Exchange increased its total volume market share from 56.9% to 75.3% since inception. Among the 16 U.S. equity exchanges, spreads have tightened and continue to improve. Aggregating the 10 ETFs, the average NBBO spread was 8.6 bps. Compared to the first trading session, NBBO spreads decreased by 23.9 bps. Recently, fund flows in the U.S. spot Bitcoin ETFs saw a big jump. $7.8 billion has piled in since February 8, making up 81% of the total net inflows that have come into these 10 ETFs since launch on January 11, 2024. Two months into trading, it is clear these U.S. spot Bitcoin ETFs are here to stay.

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