Key Takeaways:
- Bitcoin spot ETFs change hands for $4.5 billion on their first trading day across US exchanges
- Out of the 10 ETFs that were listed, the funds from BlackRock, Fidelity, and Grayscale dominated the market, accounting for nearly 90% of all trades
- Despite the hype, the price of Bitcoin maintained a slow pace, reaching a high of $48,969 before dropping down to the $46,000 range
After years of waiting, the Bitcoin spot exchange-traded funds are finally here and they didn’t disappoint. On day one, the total trading volume across all 10 BTC funds cleared $4.5 billion on US exchanges, with ETFs from BlackRock, Fidelity, and Grayscale coming out on top.
The Bitcoin-focused exchange-traded products that allow investors to gain exposure to the apex cryptocurrency without storing or holding the asset directly have been a smash hit on Wall Street. This is also an indication that there had always been a massive demand for Bitcoin even though the SEC denied the option for over a decade.
BlackRock, Fidelity, And Gryayscale’s BTC Spot ETFs Accounted For Nearly 90% Of All Trades
The US Securities and Exchange Commission (SEC) initially approved 11 spot Bitcoin ETFs, including one from Brazilian crypto asset management firm Hashdex, which is yet to start trading due to technical issues.
BlackRock’s Bitcoin ETF, the iShares Bitcoin Trust (IBIT), which trades on the Nasdaq stock exchange, was the day’s top performer. The fund accounted for 22% of the total trading volume across all the newly listed spot Bitcoin ETFs, having handled just over $1 billion by itself.
BlackRock is the world’s largest asset manager with $9.42 trillion in assets under management. The Wall Street behemoth’s ETFs, which normally trade under the iShares brand, have often enjoyed big debuts on exchanges.
As of January 10, iShares has 406 ETFs listed on the US markets, with a total AUM of $2.54 trillion.
Following closely behind was Fidelity, whose Fidelity Wise Origin Bitcoin Fund (FBTC) witnessed some $685 million worth of shares traded yesterday. Digital asset manager Grayscale’s GBTC Bitcoin ETF saw an all-time high daily trading volume of 56 million shares on Thursday.
The Grayscale Bitcoin Trust (GBTC), considered to be the largest Bitcoin-focused fund in the world, holds over $26 billion worth of BTC in its custody. The fund is also the oldest among the Bitcoin ETFs, having started life as a Bitcoin investment product for accredited investors around 10 years ago.
The offerings from Grayscale, BlackRock, and Fidelity accounted for roughly 87% of the total spot Bitcoin ETF trading volume on January 11.
Brazilian Asset Manager Hashdex’s Spot Bitcoin ETF Will Trade On A Later Date
The SEC had green-lit Bitcoin ETFs from BlackRock, Fidelity, ARK 21Shares, Franklin Templeton, Bitwise, Hashdex, VanEck, Invesco Galaxy, WisdomTree, and Grayscale for trade on various US exchanges. However, the list lost one of its entrants during the day.
Latin American investment giant Hashdex did receive permission from the SEC to convert its Hashdex Bitcoin Futures ETF, which trades on the NYSE under the ticker symbol DEFI, into a spot Bitcoin ETF. Despite approving its 19b-4 filing, the securities regulator failed to make Hashdex’s S-1 form effective, resulting in DEFI continuing to trade as a futures-based ETF.
Hashdex clarified its situation in a press statement where it said the fund currently does not hold spot Bitcoin in its portfolio, and therefore, DEFI will change its name and investment strategy at a later date to “permit” spot Bitcoin ETFs.
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ETF Hype Fails To Reflect On The Price Of Bitcoin
Bloomberg’s senior ETF analyst Eric Balchunas pointed out that most of GBTC’s trading activity was situated around selling as investors were moving their funds into newer and lower-fee products like IBIT (BlackRock) and FBTC (Fidelity).
The same could also be said for Bitcoin futures ETFs like ProShares’ BITO, which saw a record-breaking $2 billion worth of shares being traded yesterday. However, those trades were also comprised largely of investors moving from futures-based Bitcoin funds to the cheaper, and less volatile spot-based funds.
Balchunas added that investors who want to understand the impact ETFs have on the underlying Bitcoin purchases will most likely have to wait until January 13 to get a better idea of the spot inflows.
Despite the market’s expectation that new cash inflows entering the crypto market would propel Bitcoin to all-new heights, the leading cryptocurrency maintained a slow pace.
During early trading hours on Thursday, BTC rose from a low of $45,305 to a high of $47,674 before dropping down to $45,721. The world’s most valuable cryptocurrency recovered from this low to hit a 2024 high of $48,969, which coincided with the launch of spot Bitcoin ETFs in the US.
Even though the hype of spot ETFs is not reflected in Bitcoin’s price, the crypto asset is up over 8% in the year-to-date (YTD) period.
At the time of writing, Bitcoin (BTC) is trading at $46,342 – up 1.3% in the last 24 hours.
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