Bitcoin ETFs Make Robust Debut in the U.S., Forecasting All-time Highs by 2025
Summary:
Despite a subsequent crypto sell-off, the recent launch of Bitcoin exchange-traded funds (ETFs) in the United States has demonstrated initial success, with 10 ETFs hitting a combined trading volume of $10 billion within three days. While Grayscale Bitcoin Trust ETF sold a significant amount of Bitcoin, other ETF providers augmented their holdings, resulting in the ETFs owning 3.32% of all issued bitcoins. The launch has been described as a “sell-the-news” moment, with experts predicting institutional investment to drive Bitcoin to new highs post the U.S. Presidential elections, and possibly to $200,000 by the end of 2025.
The recent launch of spot Bitcoin exchange-traded funds (ETFs) in the United States initiated a crypto sell-off, yet the ETFs themselves have shown early signs of success in their first week of trading, as acknowledged by industry analysts. Since the kick-off of spot Bitcoin ETF trading on January 11, Bitcoin's value has witnessed a 6.6% reduction, falling from almost $49,000 to $42,876 as per current data from CoinGecko. This significant drop predominantly occurred within the initial two trading days, with the lowest point of the week touching $41,753.
Even though the introduction of spot Bitcoin ETFs did not foster a surge in BTC prices, as some leading investors anticipated, the funds have made an impressive debut, these industry experts confirm. The launch of spot Bitcoin ETFs in the United States ranks among the most successful, with trading volumes of 10 ETFs hitting a combined value of $10 billion within just three days.
Bitcoin ETF analyst Eric Balchunas at Bloomberg affirms that this launch saw spot Bitcoin ETFs attract an unprecedented amount of participation and volume. He stated that the total volume of all 500 ETFs launched in 2023 was $450 million, which is 2,100% less than what the spot ETFs amassed in their first three days.
The Grayscale Bitcoin Trust ETF (GBTC) contributed approximately 50% of the accumulated $10 billion volume within the first three days. Data from Yahoo Finance reveals GBTC traded more than $6.3 billion, managing around $2 billion daily in the first two trading days. Post launching the ETF, GBTC witnessed a significant sell-off, resulting in net outflows of $1.2 billion within the first three days.
However, while GBTC was busy selling massive quantities of Bitcoin, other spot BTC ETFs were augmenting their BTC holdings. GBTC sold a total of 27,122 BTC, equalling 4.4% of its initial holdings of 619,200 BTC in the first four days after launch. In contrast, other ETF providers like BlackRock, Fidelity and ARK Invest made purchases of at least 40,000 BTC cumulatively.
As per the most recent information from ETF providers, these spot ETFs possess 651,819 BTC combined, or 3.32% of all 19.6 million bitcoins that have ever been issued. So, what lies in store for spot Bitcoin ETFs? Some experts are referring to the launch as a "sell-the-news" moment, with potential for more pressure originating from the futures market.
Matthew Sigel, VanEck's Head of Digital Assets Research, believes the current correction could have been caused by Bitcoin miners more actively selling coins. He views the entry of institutions, along with the expected Bitcoin halving due in April 2024, as likely to set Bitcoin on the course to hit all-time highs after the U.S. Presidential elections in the fourth quarter of 2024. Sigel told Cointelegraph: "We expect institutional investors to speed up their purchases over the coming quarters as their asset allocation models, including Bitcoin, are released to the market."
Standard Chartered speculates that spot Bitcoin ETFs may attract an inflow of $50-100 billion in 2024, and the BTC price could potentially touch $200,000 by the end of 2025.
Published At
1/18/2024 5:01:00 PM
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