Bitcoin ETF trades top US$4.6 billion in ‘ground-breaking’ day
THE first US exchange-traded funds (ETFs) that directly hold Bitcoin got off to a strong start, with billions of US dollars changing hands in a historical first day of trading for the long-sought investment vehicles.
Over US$4.6 billion worth of shares traded between the almost a dozen US spot Bitcoin ETFs on Thursday (Jan 11). The Grayscale Bitcoin Trust, which converted into an ETF, saw about US$2.3 billion in volume, according to data compiled by Bloomberg. Meantime, BlackRock’s iShares Bitcoin Trust-IBIT- saw over US$1 billion change hands.
“This is definitely ground-breaking,” said Athanasios Psarofagis, an ETF analyst at Bloomberg Intelligence. “There was no doubt demand would be strong for these ETFs, but the numbers across the board are impressive.”
Still, it is hard to compare on Thursday’s activity to any other day in ETF history. Typically, only one fund that tracks a new asset class begins trading on a single day. It is unprecedented to see over 10 nearly identical funds all begin at once. But even singling in on one ETF indicates the sheer magnitude of trading.
The Grayscale Bitcoin Trust was the most heavily traded ETF debut on record. To be sure, the product has existed in its trust structure since 2013 and had a nearly US$27 billion headstart in asset size.
Trading volume does not indicate buying or selling or investor inflows. Because of the way the funds settle trades, net flows into or out of the products probably will not be known until at least on Friday.
When the initial Bitcoin futures fund began trading in 2021, it saw a turnover of almost US$1 billion during the entire first day. At the time, the futures fund debut was the second-most heavily traded fund on record.
Psarofagis added a caveat that much of the demand may be from so called “seed” money that is pre-arranged by the fund issuers. Signs of more organic demand, like from retail investors or financial advisors, may come later on as more broker-dealers list the funds on their platforms. BLOOMBERG
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