The spot bitcoin ETF was listed and traded, and bitcoin rose about 7% before turning down, and the grayscale trading volume exploded
On Thursday, Bitcoin celebrated a historic day when a Bitcoin spot ETF was listed for trading for the first time in its history. Bitcoin ETFs have a huge trading scale and have written an important chapter in the history of ETFs.
Eastern time on Thursday morning, Bitcoin rose above $49,000 intraday, hitting a new high since December 2021 and rising about 6.8% on the day. The listed and approved bitcoin ETFs followed suit, with BlackRock's spot bitcoin ETF (IBIT) rising about 5%, and grayscale's ETF (GBTC) rising more than 6%.
However, after that, at noon ET on Thursday, the enthusiasm subsided, and Bitcoin turned down as a whole during the day, returning to below $46,000. Related ETFs also narrowed their gains and turned lower intraday. Grayscale ETFs turned lower at one point, and BlackRock's ETF even fell by 4% intraday, but the decline has since narrowed.
Bitcoin is traded around the clock, so the first day of activity varies from fund to fund and will be affected by the timing of its issuance.
On the whole, Bitcoin fluctuated sharply on Thursday and went in a V-shape, but the right side of the V was a little shorter:
The market pays close attention not only to the price performance of Bitcoin ETFs themselves, but also to whether the trend of these ETFs can well track the underlying asset Bitcoin, the trading volume of ETFs, and the fund fees:
If there is a large gap between the price of the ETF and the price of the underlying underlying asset for multiple days, it may be a sign of thin ETF trading or structural problems, which can scare away potential buyers, even if the fund outperforms the underlying asset in a short period of time, investors will not buy it. Analysts had expected up to $4 billion in inflows on the first trading day after the approval of the Bitcoin spot ETF. Trading volume is a key metric that investors pay attention to, as the higher the trading volume, the more efficient it is perceived. On the eve of the SEC's final ruling on the listing of bitcoin spot ETFs, potential bitcoin ETF issuers have further reduced fees to attract investors and highlight the fierce competition in the space. Many ETF issuers offer a short-term management fee of 0, and Bitwise remains the cheapest option at the moment, charging a 0.20% fee after the fund's initial launch period.
On Thursday, both Grayscale's Bitcoin ETF and BlackRock's iShares Bitcoin ETF traded millions of shares in the first 10 minutes of the trading session. Judging from the trading volume data of brokerages in the chart below, the new 11 bitcoin ETFs reached $3.66 billion by 2 p.m. EST, which is quite close to the $4 billion forecast above, of which nearly half of the trading volume comes from grayscale ETFs.
The spot bitcoin ETFs shown in the table above are the lucky ones who were approved by the U.S. Securities and Exchange Commission (SEC) yesterday Wednesday and began trading on Thursday. Approved spot Bitcoin ETF issuers include: Grayscale, Bitwise, Hashdex, iShares, Valkyrie, Ark 21Shares, Invesco Galaxy, Vaneck, WisdomTre, Fidelity, and Franklin.
Typically, only one fund that tracks a new asset class starts trading within a day. For the first time ever, more than a dozen almost identical ETFs were launched at the same time. But even if you look at an ETF, you can see the sheer size of the deal. In just three hours, the Grayscale Bitcoin ETF ranked among the third-most traded ETFs on record.
The trading volume of the Bitcoin spot ETF on the first day of listing was huge, and market participants commented on this:
This is absolutely groundbreaking. There is no doubt that the demand for these ETFs will be strong, and the overall numbers are impressive.
However, industry insiders also caution that most of the demand may come from so-called "seed" funds pre-arranged by fund issuers. As more broker-dealers list funds on their platforms, there may be more signs of organic demand, such as from retail investors or financial advisors.
It is important to note that trading volume does not represent the inflow/outflow of investors' funds. Due to the way funds settle transactions, net inflows/outflows of a product may not be known until at least Friday.
Crypto investors have been eagerly awaiting the eventual regulatory approval of a Bitcoin spot ETF as it will give mainstream investors more peace of mind about the digital currency. The approval of the Bitcoin spot ETF will allow investors to trade the digital currency in their traditional stockbroking accounts, rather than on those startup platforms. Previously, the cryptocurrency industry has experienced a series of scandals and bankruptcies, and various startups have come under increasing scrutiny.
In fact, in practice, even a traditional stockbroking account is different. For example, some netizens pointed out that they transferred funds from Vanguard to Fidelity because the former does not support Bitcoin ETF trading.