High trading volume of Bitcoin ETF does not necessarily mean high buying: NYDIG | CoinDesk JAPAN

• NYDIG's Greg Cipolaro points out that a fund's turnover rate, or dollar trading volume divided by the fund's net asset value, is a good metric to watch.
• The turnover rate of the entire Bitcoin spot ETF is 5.3%. Valkyrie's BRRR and Grayscale's GBTC are the lowest at 2.2% and 2.4%, respectively.

According to a report by NYDIG, it is generally believed that high trading volumes in newly launched Bitcoin spot ETFs (exchange traded funds) indicate strong investor appetite, but this does not necessarily mean that That may not be the case.

High trading volume does not indicate capital inflow.

“Daily trading volume is not a reliable indicator of daily capital flows. This is a misunderstanding.”

For example, Cipolaro points out that Grayscale's GBTC has consistently had the highest trading volume, with a total of $20 billion (3 trillion yen, at an exchange rate of 150 yen to the dollar) since the launch of the spot ETF on January 11. I mentioned that it exceeds. While this could lead us to assume that GBTC is the best investment among the 10 Bitcoin ETFs, GBTC has actually lost more than $7 billion in assets, which is a direct correlation between trading volume and inflows. He explained that this is the clearest indication that there is almost no correlation between the two.

The trading volume of IBIT by BlackRock, the world's largest asset management company, is only about $13 billion (approximately 1.95 trillion yen), more than half of GBTC, but its assets under management range from $0 to nearly $7 billion. increased.

Focus on trading turnover rate

Cipolaro prefers to look at a fund's turnover rate, which is the dollar trading volume divided by the fund's net asset value. He said: “This ratio shows the proportion of a fund's assets traded on a given day and provides a glimpse into the profile of an investor or trader and potentially what motivates their investment choices. It is possible,” he pointed out.

According to Cipolaro, the overall turnover rate for Bitcoin spot ETFs is 5.3%. The lowest BRRR is Valkyrie and Grayscale's GBTC at 2.2% and 2.4%, respectively. The highest is ARKB of Ark 21 (Ark 21) at 11.3%. He also noted a high outlier, WisdomTree's BTCW, the smallest physical ETF with just about $30 million in assets, which had a five-day turnover of 205%. .

Cipolaro pointed out that it's not unusual for other popular ETF groups, such as the many funds that track the S&P 500, to have different turnover rates. The options market may be a factor in this difference, and if options on Bitcoin spot ETFs are approved, turnover rates could change from what is currently observed, he said. is thinking.

｜Translation and editing: Rinan Hayashi
｜Image: Markus Winkler/Pixabay
｜Original text: Bitcoin ETF High Volume Doesn't Always Mean Heavy Buying: NYDIG