New Bitcoin ETFs Experience Booming Trading Volumes on Debut Day
Summary:
The first day's trading of new Bitcoin exchange-traded funds (ETFs), including those from BlackRock, Grayscale, and Fidelity, saw a significant rise in volume, exceeding $4.5 billion. However, Hashdex didn't have a strong start, with its fund operating as a futures-based ETF. Most trading activity was speculated as selling among several ETFs. Analysts suggest that investors might need to wait until clearer spot inflows data emerge to understand the impact of the ETFs on Bitcoin purchases.
The debut day of numerous newly launched Bitcoin (BTC) exchange-traded funds (ETFs) saw an explosion in trading volumes, with offerings by BlackRock, Grayscale, and Fidelity racking up the highest totals. A particular issuer, however, had a less than stellar start. According to Cointelegraph's compilation of Yahoo Finance's data, the combined volume of the top ten Bitcoin ETFs exceeded $4.5 billion in the inaugural day's trading. BlackRock's iShares Bitcoin Trust (IBIT) recorded the highest performance among the newcomers, processing just above $1 billion in volume — making up 22% of the total group volume. Nonetheless, IBIT closed 4.69% lower that day.
Trailing shortly behind was Fidelity's Bitcoin ETF — FBTC — with a trading volume of approximately $685 million on the first day. Grayscale’s Bitcoin ETF (GBTC), converted from its previous Grayscale Bitcoin Trust, registered $2.2 billion in volume. Hashdex, however, didn't join the day's Bitcoin ETF frenzy. Although the SEC approved Hashdex's 19b-4 filing permitting its ETF to be listed on U.S. exchanges, the S-1 form wasn't made effective. As a result, Hashdex's "DEFI" fund is still operating as a futures-based ETF, with a company note clarifying that the fund currently holds no Bitcoin.
It's crucial to acknowledge that trading volume encapsulates both inflows and outflows, not providing a comprehensive view of buying versus selling activity during the day. Eric Balchunas, a senior Bloomberg ETF analyst, postulated that most of GBTC's trading activity was selling as investors migrated to recently launched, lower-fee products like BlackRock's and Fidelity's ETFs. Colleague James Seyffart corroborated this perspective.
ProShares Futures Bitcoin ETF (BITO) also clocked impressive trading figures, with over $2 billion in total volume. This is speculated to be predominantly selling as investors transition from futures-based Bitcoin investments to cost-effective and stable spot-based exposure. Investment manager Timothy Peterson of Cane Macro deduces from the ETF activity that about 47,000 Bitcoin (valued at $2.1 billion with current market prices) would need to be procured on the spot market.
To comprehend the ETFs' implications on underlying Bitcoin purchases, Balchunas suggests that investors would have to wait until the morning of January 13 for a clearer picture of spot inflows.
Published At
1/12/2024 3:48:09 AM
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