The launch of US-listed spot Bitcoin exchange-traded funds (ETFs) has been a game-changer for the cryptocurrency market, and its impact was on full display this week as the price of Bitcoin hit a new all-time high before sharply correcting. Ten spot Bitcoin ETFs collectively topped $10 billion in trading volume on Tuesday, breaking the previous record set just last week.

The event coincided with Bitcoin's landmark rally, which saw the cryptocurrency break $69,000 for the first time, surpassing its previous all-time high from November 2021. However, the euphoria was short-lived as profit taking followed, leading to a sharp correction that saw Bitcoin's price fall by over 10%.

Eric Balchunas, an ETF analyst at Bloomberg Intelligence, emphasized the importance of this trading volume, noting, “These are fantastic numbers for an ETF that is less than 2 months old.” Spot Bitcoin ETFs began trading on January 11, and their rapid rise to record volumes underscores growing institutional interest in gaining exposure to the world's largest cryptocurrency.

Leading the way was BlackRock's iShares Bitcoin Trust (IBIT), which was the fourth-most traded of all ETFs on Tuesday with more than $3.8 billion in volume, according to Barchart data. Other top gainers included Fidelity's FBTC, Bitwise's BITB and ARKB, jointly managed by Ark Invest and 21Shares, which broke their personal volume records.

While active Bitcoin ETF trading last week was largely driven by strong net inflows as funds raised more than $1.7 billion in fresh money, Tuesday's action may point to a different picture. Analysts speculate that the record trading volume could be due to high profit-taking: traders were either spooked by high volatility or decided to sell ETF shares to capture the 50% gain in Bitcoin's price over the past month.

Fidelity's Bitcoin ETF, Wise Origin Bitcoin Fund (FBTC), has performed outstandingly since its inception. On Monday, the fund recorded its largest daily inflow of $404.6 million, bringing its total assets to an impressive $7.49 billion. Fidelity has received $5.2 billion since the ETF's launch, according to BitMEX Research, strengthening its position as a major player in the growing Bitcoin ETF market.

The success of spot Bitcoin ETFs has been nothing short of remarkable, with total assets under management (AUM) topping $50 billion on Tuesday, starting at just under $30 billion including Grayscale's holdings. New inflows into the funds brought in a net $7.9 billion, with the rest of the gains coming from the rise in Bitcoin's price.

Balchunas believes that if these ETFs continue to maintain their current momentum, adding $10 billion in assets per month - a prospect that he considers both unusual and plausible, depending on the trajectory of Bitcoin prices - they could potentially outperform gold assets under management. ETF by this summer.

A comparison with gold ETFs shows an interesting dynamic as both Bitcoin and gold hit new all-time highs, causing some confusion regarding investors' risk appetite. While Bitcoin's rise is partly due to increased investment in recently launched US ETFs, the rise in gold prices could indicate a defensive stance among investors amid concerns about geopolitical tensions or potential corrections in global stock markets. Regardless of perceived risk appetite, both Bitcoin and gold are seen as potential beneficiaries of the Federal Reserve's expected looser monetary policy. Market swaps indicate a 62% chance of a June interest rate cut, down from 58% at the end of February, which could further fuel demand for these alternative assets.