- Bitcoin ETF trading volume surpassed $1 billion amid the latest crypto downturn
- Galaxy’s head of research expects the Bitcoin ETFs to see inflows as investors buy the dip
- The crypto market crash was triggered by aggressive selling by firms like Jump Trading and Paradigm VC
The crypto market took a sharp downturn this week, triggering a surge in trading volumes for Bitcoin exchange-traded funds (ETFs).
Trading Volumes Hit Record Highs
Trading volumes for Bitcoin ETFs surged past $1 billion at the start of trading on August 5th as crashing crypto markets triggered extremely elevated trading activity.
Alex Thorn, head of research at asset manager Galaxy Digital, said in a post that after only 20 minutes of trading, Bitcoin ETFs had already clocked more than $1.3 billion in volume. The iShares Bitcoin Trust saw the highest churn at upward of $875 million.
Thorn expects Bitcoin ETFs to see net inflows from investors buying the dip. The downturn was led by Ether (ETH), which dropped upwards of 21% after funds including Jump Trading and Paradigm VC sold hundreds of millions worth of Ether.
Macro Environment Weighs on Crypto
The overnight crypto sell-off came amid a worsening macro environment that has rattled all asset classes. The S&P 500 stock index is down more than 5% since August 1st.
Analysts say poor US unemployment data last week and interest rate hikes in Japan have caused volatility to spike sharply across assets. Markets have seen huge unwinds as traders exit overleveraged positions.
Outlook Remains Uncertain
Markus Thielen, founder of 10x Research, told Cointelegraph he expects new crypto investment to slow until markets settle.
“The market structure has been weak for months – it’s unlikely significant players will invest amid high volatility and unpredictable prices,” he said. “Many still need to exit positions and deleverage their portfolios.”
The path forward remains unclear as macro uncertainty persists. However, Bitcoin ETF volumes show strong demand exists on dips. Crypto markets remain volatile but major selloffs often mark bottoms from which a recovery can occur.
