The recently launched spot Bitcoin ETFs are doing big business, with 10 funds hosting close to $10B worth of volume during their first three days of trading.
Data compiled by James Seyffart, an ETF analyst at Bloomberg, shows the spot Bitcoin exchange-traded funds (ETFs) driving $9.8B worth of trades over three days. Seyffart also shared data indicating the products have received inflows totaling 21,000 BTC or $894M.
Eric Balchunas, a fellow Bloomberg analyst, noted that the Bitcoin ETF activity far surpasses that of ETFs tracking traditional asset classes that debuted in 2023.
“Let me put into context how insane $10b in volume is in [the] first three days,” Balchunas tweeted. “There were 500 ETFs launched in 2023. Today, they did a COMBINDED $450m in volume. The best one did $45m. And many have had months to get going. [Blackrock’s iShares Bitcoin Trust] alone is seeing more activity than the entire ’23 freshman class.”
Ophelia Synder, the co-founder of Bitcoin ETF issuer, 21Shares, tweeted that the ETFs’ impressive performance comes despite the majority of institutions not yet having access to the funds and most financial advisers not being able to advise clients on the sector.
Spot Bitcoin ETF
The highly anticipated Bitcoin ETFs received regulatory approval on Jan. 10, with trading commencing the following afternoon. The approval came more than 10 years after the Winklevoss twins first filed for a spot Bitcoin ETF in 2013.
The crypto community had long touted the bullish potential of a spot Bitcoin ETF, which, unlike existing futures ETFs, would directly purchase and hold BTC on behalf of investors — exerting bullish pressure on BTC’s finite supply.
On Jan. 16, the board of trustees for VanEck, a prominent asset issuers, voted to liquidate and dissolve the company’s Bitcoin futures ETF, which began trading in November 2021. The news follows VanEck launching a spot Bitcoin ETF on Jan. 11.
Grayscale dominates ETF volumes but suffers heavy outflows
Seyffart’s data shows Grayscale boasting the lion’s share of spot Bitcoin ETF activity, hosting $5.17B worth of trades in three days.
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Despite Grayscale’s ETF hosting the lion’s share of volume, the fund has also experienced sizable outflows. Balchunas posted data indicating that nearly $1.2B has flowed out of the Grayscale Bitcoin Trust ETF.
However, Seyffart expects “a meaningful percentage of those assets to find their way back into Bitcoin, mostly other ETFs” — suggesting many GBTC investors may be jumping ship to other funds as Digital Currency Group, Grayscale’s parent company, grapples with the fallout from its subsidiary Genesis’s bankruptcy.
Speaking to Bloomberg on Jan. 17, Rachel Aguirre, Blackrock’s head of U.S. iShares ETF product, said inflows to BlackRock’s ETF are coming from “a number of different directions” when asked whether capital was moving out of GBTC and into the IBIT ETF.
Data from Arkham Intelligence shows Grayscale sending 18,400 BTC ($788M) to a Coinbase Prime wallet in recent days. The company still holds 617,853 BTC worth roughly $26.4B.
Grayscale was instrumental in paving the way for the spot Bitcoin ETFs’ approval. In June 2022, the United States Securities and Exchange Commission (SEC) rejected Grayscale’s October 2021 application to convert its Bitcoin Trust into a spot Bitcoin ETF. However, the District of Columbia Court of Appeals rejected the SEC’s verdict last August, with the SEC declining to appeal the decision in October.
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