What are the liquidity levels of different Bitcoin ETFs?

Liquidity Metrics Across Major Bitcoin ETFs

1. BlackRock’s iShares Bitcoin Trust (IBIT) consistently reports the highest average daily trading volume among U.S.-listed Bitcoin ETFs, frequently exceeding $2 billion per session. Its bid-ask spread remains tightly compressed, often under 0.05%, indicating deep institutional participation and robust market maker support.

2. Fidelity’s Wise Origin Bitcoin Fund (FBTC) maintains strong secondary market liquidity, with average daily volume hovering near $1.3 billion. Order book depth on major exchanges shows consistent resting liquidity within ±1% of the net asset value, reflecting disciplined arbitrage activity.

3. Bitwise Bitcoin ETF (BITB) demonstrates moderate liquidity, averaging $450 million in daily volume. Its assets under management have grown steadily, enabling improved quote competitiveness, though spreads widen slightly during overnight sessions outside U.S. equity hours.

4. Grayscale Bitcoin Trust (GBTC), following its conversion to an ETF in January 2024, experienced a sharp initial surge in turnover. Current daily volumes remain elevated at approximately $1.8 billion, though its premium/discount volatility has decreased significantly compared to its pre-ETF structure.

5. Ark 21Shares Bitcoin ETF (ARKB) trades with narrower absolute spreads than smaller peers but exhibits higher relative slippage on large orders due to lower average order book depth—typically less than 30% of IBIT’s quoted size at equivalent price levels.

Order Book Depth and Market Impact

1. On Nasdaq, IBIT displays over $12 million in cumulative displayed liquidity within 0.1% of mid-price across top five bid and ask levels during regular market hours.

2. FBTC shows comparable depth on NYSE Arca, with $9.7 million visible within the same tolerance band, though liquidity concentration skews more heavily toward the best bid than the best ask.

3. BITB’s displayed depth falls to $3.2 million under identical parameters, resulting in measurable execution impact for orders above $500,000 not using algorithmic routing.

4. GBTC retains structural depth advantages inherited from legacy OTC trading infrastructure, with persistent hidden liquidity layers detectable via time-and-sales analysis, especially around round-number price thresholds like $60,000 or $70,000.

5. ARKB’s order book exhibits pronounced fragmentation across venues, with Nasdaq accounting for only 42% of its total reported volume—raising concerns about cross-venue latency arbitrage and inconsistent price discovery.

Secondary Market Premiums and Arbitrage Efficiency

1. IBIT’s 30-day median premium stands at +0.08%, with standard deviation of 0.14%, signaling highly responsive creation/redemption mechanics and minimal structural mispricing.

2. FBTC trades at a near-zero median premium (+0.01%), supported by Fidelity’s proprietary authorized participant network and rapid intra-day NAV updates.

3. BITB shows a +0.22% median premium, attributable to slower redemption cycles and fewer active APs willing to hold inventory during volatile BTC price action.

4. GBTC’s post-conversion premium has stabilized between -0.05% and +0.15%, a dramatic improvement from its prior -20% discount regime under closed-end fund rules.

5. ARKB displays the widest dispersion, ranging from -0.4% to +0.6%, reflecting intermittent AP participation and sensitivity to broader thematic ETF flows rather than pure BTC exposure demand.

Trading Venue Distribution

1. IBIT draws 58% of its volume from Nasdaq, 22% from NYSE Arca, and 14% from Cboe BZX, with the remainder split across dark pools and internalizers.

2. FBTC concentrates 67% of volume on NYSE Arca, benefiting from Fidelity’s direct exchange connectivity and preferential fee schedules.

3. BITB sees 49% of volume executed on Cboe BZX, where it enjoys dedicated market maker incentives and enhanced liquidity rebates.

4. GBTC volume is evenly distributed across Nasdaq (33%), NYSE Arca (31%), and Cboe BZX (29%), suggesting broad-based distribution without venue dominance.

5. ARKB relies disproportionately on off-exchange venues, with 38% of reported volume occurring in dark pools—a pattern correlated with its higher observed slippage metrics.

Frequently Asked Questions

Q: How does the SEC’s ETF approval framework affect liquidity provider behavior?Authorized participants adjust quoting strategies based on redemption eligibility windows, custody verification timelines, and settlement cycles mandated by SEC Rule 6c-11. Tighter compliance requirements correlate directly with narrower spreads and deeper order books.

Q: Why do some Bitcoin ETFs show persistent premiums despite identical underlying exposure?Premiums reflect differences in AP capacity, custody arrangements, tax treatment clarity, and investor base composition—not just BTC price tracking. Funds with opaque redemption terms or limited AP onboarding face structural pricing inefficiencies.

Q: Does high trading volume always indicate healthy liquidity?No. Volume without corresponding depth or narrow spreads may signal wash trading, momentum chasing, or fragmented order flow. True liquidity requires sustained two-way interest, tight bid-ask spreads, and low slippage across varying trade sizes.

Q: Are Bitcoin ETFs subject to the same liquidity stress tests as traditional equity ETFs?Yes. SEC-mandated liquidity risk management programs require ETF sponsors to conduct quarterly assessments using metrics such as 30-day average daily trading volume, bid-ask spread volatility, and NAV deviation thresholds—all applied uniformly regardless of underlying asset class.