Spot Bitcoin ETFs Record Significant Volume on Day 1 — BTC Price Closes to $49K
After 10 years of anticipation, traders finally saw the first Bitcoin (BTC) exchange-traded fund (ETF) approved by the United States Securities and Exchange Commission on January 10, and ETF trading began at the opening bell. In less than 24 hours.
BlackRock's iShares Bitcoin Trust (IBIT), Grayscale Bitcoin Trust (GBTC), Valkyrie Bitcoin Fund (BRRR), Bitwise (BITB) and ARK 21Shares Bitcoin ETF, among others, have begun trading.
The first few trading hours saw heavy trading. Bloomberg Bitcoin ETF analyst Eric Balchunas had a similar observation:
“Wow, only 20 minutes to trade and volume is huge, half a billion traded for the group (eg GBTC) (much more than $BITO) led by $IBIT (which is close to a lock to pass $1b) and $FBTC in the first few days Note that almost all of the available volume is converted into an incoming stream.
In early trading, the Greyscale Bitcoin Trust rose 6%, while the iShares Bitcoin Trust jumped more than 4%.
At the time of writing, GBTC is the largest of the group, “40% of the total volume”, which passed the $1 billion mark in the first two hours.
Update: $1.44bn total ETF position size now
GBTC 40% of total volume pic.twitter.com/fns5yIzL3K
— BitMEX Research (@BitMEXResearch) January 11, 2024
The Greyscale fund, which had more than $28 billion in assets, was converted from a sell order.
The Hashdex fund is a strategy shift from the existing Bitcoin futures ETF. However, according to SEC filings, the change has not yet taken effect at the time of writing.
The regulator has approved 11 spot Bitcoin ETFs to make investments in the world's largest cryptocurrency by market capitalization without the risk of directly holding the digital token.
Jim Cramer on BITCOIN ETF Acceptance ‼️
“It's a winner, because the people want it…
People didn't want to be in a situation where they were in some ‘bank' where their money disappeared overnight.
The customer is right, Jamie Dimon.” #Bitcoin pic.twitter.com/reGH5PFjpR
— Swan Media (@Swan) January 11, 2024
Meanwhile, charting platform TradingView has made it easy for traders to track and analyze their performance using price tags for spot Bitcoin ETFs.
Bitcoin ETFs are now available on TradingView
IBIT – iShares BitcoinBITB – Bitwise BitcoinDEFI – Tidal BitcoinARKB – ARK BitcoinGBTC – Grayscale BitcoinFBTC – Fidelity BitcoinBTCW – WisdomTree BitcoinBTCO – Invesco BitcoinBRRR – Valkyrie BitcoinHODL – VanEck BitcoinEZBC -… pic.twitter.com/hquXWG43uh
— TradingView (@tradingview) January 11, 2024
The broader crypto market rises alongside Bitcoin ETF trading volumes.
As the space began trading Bitcoin ETFs, the cryptocurrency's price began to rise, with Bitcoin (BTC) up more than 2.7% on the day, according to data from CoinMarketCap. At one point, the cryptocurrency rose above $49,000 before settling at its current price.
The total crypto market capitalization is at $1.76 trillion, up 3.57% in the last 24 hours.
Market participants will continue to closely monitor Bitcoin ETFs to see how they perform, but also how closely they correlate to the price of BTC.
A negative correlation between the fund's price and the price of its underlying assets over several days could be a sign of thin trading or structural issues with the ETF. Although the fund has outperformed spot bitcoin for the time being, this may scare away buyers.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
