With ETF trading going live on Thursday and the total trading volume getting to $4.6 Billion on the first day, it was a challenging day since many believe that the ETF did not attract the massive inflows that were being expected and the market did not see a massive pump in Bitcoin price.
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Spot Bitcoin ETF and Bitcoin observe less inflows despite $4.6B Total Trading Volume
Spot Bitcoin ETFs made a robust debut on Thursday following approval from the U.S. Securities and Exchange Commission (SEC) for listing and trading by all 11 spot Bitcoin ETF issuers, including industry giants like BlackRock and Grayscale, on exchanges on January 10.
However, despite the impressive $4.6 billion total trading volume for the newly listed ETFs, experts suggest that these spot Bitcoin ETFs attracted minimal inflows.
Ran Neuner, co-founder of Onchain Capital and founder of Crypto Banter, expressed dissatisfaction with the Bitcoin ETF’s first day, emphasizing that while many report over $4.5 billion in total trade, a careful analysis reveals nearly zero new inflows.
$4.6 Billion Total Trading Volume on the Inaugural Day
The 11 spot Bitcoin ETFs, featuring offerings from major financial institutions such as BlackRock and Fidelity Investments, generated substantial trading volume with approximately $4.6 billion in shares traded on the inaugural day.
Bloomberg senior ETF analyst Eric Balchunas highlighted a total of 700,000 individual trades involving the 11 spot ETFs.
Neuner pointed out that while the total trade amounted to $4.6 billion, the Grayscale Bitcoin Trust (GBTC) accounted for $2.3 billion. However, most of the GBTC figures were attributed to sales and outflows, influenced by the higher 1.5% fees and locked-up older Bitcoin. Consequently, Neuner asserted that the actual numbers reflected close to zero new inflows.
Bloomberg ETF analyst James Seyffart shared the view that a significant portion of the trading volume involved selling GBTC and buying other spot Bitcoin ETFs. Despite this, Seyffart remains optimistic about the substantial demand for spot Bitcoin ETFs throughout the year.
Cryptocurrency Market and Bitcoin Price Fluctuations
In the cryptocurrency market, Bitcoin experienced price fluctuations, briefly reaching near the $49,000 level but retracing below $46,000 within three hours. The current BTC price stands at $45,991, with a 24-hour low and a high of $45,620 and $48,969, respectively.
Notably, the trading volume has decreased by 14% in the last 24 hours, signaling a decline in trader interest. Analysts anticipate potential pullbacks in the coming week, despite expectations for Bitcoin to reach $50,000, influenced by volatility and trader sentiment.
To conclude, the inaugural day of Spot Bitcoin ETFs, with a $4.6 billion total trading volume, proved challenging as anticipated massive inflows did not come in. Despite substantial trading, particularly in Grayscale Bitcoin Trust, minimal new inflows were observed, while Bitcoin’s fluctuating price and a 14% decline in trading volume hint at potential pullbacks despite a $50,000 target. But there is still optimism related to Bitcoin and ETF and it is expected to get massive in the long term.
Note: It’s a research based article not a financial advice.
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