Asset managers have wasted no time in listing their spot Bitcoin (BTC) exchange-traded funds on the open market following Wednesday’s historic approval – and the demand has been healthy, giving a boost to BTC price and the crypto market as a whole.
Data shows that multiple ETFs began trading during the pre-market hours, including BlackRock’s iShares Bitcoin Trust, with the ticker symbol IBIT, which is listed on the Nasdaq exchange.
Bloomberg Intelligence senior ETF analyst Eric Balchunas noted that IBIT saw more than $2 million worth of shares traded in just two hours of pre-market trading, saying, “That would be a great first FULL day for a normal ETF let alone at 6 am [before market].”
Balchunas also highlighted that Grayscale completed the conversion of its Grayscale Bitcoin Trust (GBTC) into an ETF “just like that,” and said, “It is bringing a (volume) gun to a knife fight today, but on flip, it has that advisor-repelling 1.5% fee.”
Trading activity for the group of ETFs jumped even higher after the market opened, with Balchunas saying that they collectively saw more than $500 million in volume during the first 20 minutes of trading.
Wow, only 20 min into trading and the volume is big with HALF A BILLION traded for the group (ex GBTC too) (outpacing $BITO by a lot) led by $IBIT (which is near lock to pass $1b) and $FBTC. Imp to note almost all the volume in first few days will convert to inflows. pic.twitter.com/LrGxZTFNsG
— Eric Balchunas (@EricBalchunas) January 11, 2024
At the time of writing, GBTC is trading at $40.73, an increase of 0.6% on the 24-hour chart, and trades on the New York Stock Exchange (NYSE). The Bitwise Bitcoin Trust (BITB) and the Hashdex Bitcoin Futures ETF (DEFI), which holds spot BTC following SEC approval, also trade on the NYSE.
The ETFs currently trading on the Cboe BZX Exchange include the ARK 21Shares Bitcoin ETF (ARKB), Invesco Galaxy Bitcoin ETF (BTCO), the WisdomTree Bitcoin Fund (BTCW), the Fidelity Wise Origin Bitcoin Fund (FBTC), the VanEck Bitcoin ETF (HODL) and Franklin Templeton’s Franklin Bitcoin ETF (EZBC).
The Valkyrie Bitcoin Fund (BRRR) trades on the Nasdaq.
Within hours of the market opening, Balchunas noted that the newly launched ETFs, combined with the futures-based Proshares Bitcoin Strategy ETF (BITO), surpassed a daily trading volume of $3.5 billion.
LATEST: The 10 fresh spot bitcoin ETFs have seen $1.3b in trading volume so far (as a group they already topped $BITO's record). If we add in $GBTC we get to $2.3b. And if we add in $BITO (which is having record day too but isn't part of 'spot' race) we get $3.5b for the complex pic.twitter.com/rrKxywg5rU
— Eric Balchunas (@EricBalchunas) January 11, 2024
As a result of the surge in attention, Bitcoin’s price spiked to a high of $49,107 shortly after the markets opened, but has since slid back to support at $46,000.
BTC/USD Chart by TradingView
"This is more than just an approval for a Bitcoin ETF; it's a catalyst for societal transformation. It opens the door for further innovation and integration of cryptocurrencies into the economic fabric, ultimately exposing the broader population to the principles of decentralization and trustless systems,” said Nick Emmons, co-founder and CEO of Upshot. “As this understanding deepens, we'll see a ripple effect, where the ethos of decentralization, which has been the bedrock of the crypto industry for over a decade, will begin to permeate and influence other critical functions of society."
While most agree that the launch of spot BTC ETFs will be good for the crypto industry overall, it's important to remember the original purpose of blockchain and not lose sight of those roots.
“The SEC's approval of a spot BTC ETF is a huge milestone and signal of validation for the industry,” said Andy Bromberg, CEO of crypto payments firm Beam. “However, it's also important to recognize that if crypto adoption primarily occurs through ETFs and similar centralized financial instruments, we may fall short of realizing the core principles of the technology — decentralization and true ownership. This underscores the need for the industry to maintain its focus on developing user-friendly, mainstream-ready self-custody solutions that can fulfill the original promise of crypto.”
“There are two sides to the approval,” said Anouk Morin, web3 PR lead for Ditto PR.
“On one hand, it’s a big win reputation-wise for an industry still recovering from setbacks in 2023, including the FTX scandal,” Morin said. “Backing by major financial institutions is a game-changer, drawing new attention and fortifying crypto’s image after a challenging year marked by trust erosion and bad PR.”
“On the flip side, the excitement around the announcement means that crypto - as it was intended to exist - still isn’t yet the alternative to financial institutions,” she said. “Relying heavily on approval from the ‘big guys’ indicates a need for self-validation. To thrive, the crypto space must stick to its core values of decentralization and trustlessness, forging its own path and building its own reputation.”
According to crypto researcher and decentralization advocate Chris Blec, introducing institution-driven ETFs will be detrimental to the decentralized nature of the Bitcoin network in the long run.
The approval of Bitcoin ETFs will inevitably turn out to be a very bad thing for Bitcoin decentralization.
— Chris Blec (@ChrisBlec) January 10, 2024
