Bitcoin spot ETFs trade over $1 billion in the first 30 minutes after launch
First-day Bitcoin ETF volumes suggest predictions underestimate demand.
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The long-awaited Bitcoin spot exchange-traded funds (ETFs) launched today after receiving SEC approval yesterday, and market demand led to explosive trading volume in the first 30 minutes. Across all 11 approved spot Bitcoin ETFs, over $1.2 billion worth of shares traded hands within the first half hour of market opening, according to Bloomberg ETF analyst James Seyffart.
The Grayscale Bitcoin Trust (GBTC) led the way with a staggering $446 million in volume in the initial 30 minutes. This was over 50% more volume than the next highest ETF, the iShares Bitcoin Trust (IBIT), which saw $389 million trade. In total, five of the new ETFs eclipsed the $100 million mark in the first 30 minutes.
Seyffart likened the frenzied early trading to a “Cointucky Derby,” tweeting that GBTC and IBIT were “HOT out of the gate.” The rush to invest in these long-awaited products shows the pent-up appetite institutional investors have to gain regulated crypto exposure.
Spot #bitcoin ETFs crossed $1.2 billion in trading volume in first 30 min of trading!
It's not fancy but here's the Cointucky Derby as im watching it. @vaneck_us's $HODL got a later start than the others but @Grayscale's $GBTC and @BlackRock's $IBIT are HOT out of the gate. pic.twitter.com/FKYev3JSrq
— James Seyffart (@JSeyff) January 11, 2024
Earlier in the morning, Bloomberg ETF analyst Eric Balchunas tweeted that volume for the group (excluding GBTC) had exceeded half a billion dollars only 20 minutes into trading. He noted that this handily outpaced the first-day performance of the Bitcoin futures ETF, the ProShares Bitcoin Strategy ETF (BITO), which launched last year.
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
As Balchunas notes, the trading volume in an ETF’s first days largely converts into inflows because of the creation/redemption process used by ETFs. When an ETF is launched, authorized participants (APs) create shares by depositing Bitcoin into the ETF, and this seed investment represents the initial assets under management.
Standard Chartered Bank previously predicted that inflows into Bitcoin ETFs may top $100 billion by the end of 2022. Galaxy Digital was even more bullish, forecasting up to $39 billion per year by 2024. If the early trading action is any indication, these predictions may prove conservative.
All eyes are now on the approval of an Ethereum spot ETF after the Bitcoin spot ETF barrier has been broken. Leading asset managers like BlackRock and Fidelity have previously filed for an Ethereum Trust ETF, and sentiment builds that a spot Ether product is viable with the SEC seemingly more amenable to crypto ETFs.