The early success of Bitcoin ETFs is evident in the impressive trading volumes, with a total of $9.6 billion recorded over the first three days of their introduction. Tuesday’s trading session for U.S.-based spot bitcoin exchange-traded funds (ETFs) witnessed a notable decline in activity, with trading volumes plummeting by 37% compared to January 12, 2024. The day concluded with most funds slightly over 1% lower against the U.S. dollar, with Grayscale’s GBTC capturing most of the trading volume.
Dip in Trading Vigour
This decline in trading vigor stands in stark contrast to the initial two days for the nine newly introduced spot bitcoin ETFs, along with the recently converted GBTC ETF. Market data indicates a total trading volume of $1.94 billion for the ten U.S.-focused spot BTC ETFs. The previous day had witnessed $3.15 billion in global trade volume, bringing the total recorded across all three days of trading to $9.63 billion. Analysts are closely monitoring the early success of Bitcoin ETFs, and the remarkable trading activity reflects a strong market response, surpassing expectations.
Grayscale’s GBTC and Blackrock’s IBIT dominated the trading volume on Tuesday, with GBTC accounting for a significant $1.01 billion and IBIT recording $372.31 million. The Fidelity Wise Origin Bitcoin Fund (FBTC) also experienced substantial trading, reaching $322.82 million. Ark Invest and 21shares’ ARKB ETF observed $124.52 million in trades. Remarkably, these four ETFs represented $1.83 billion or 94.32% of the day’s total volume.
Analyst’s Perspective
Bloomberg’s senior ETF analyst, Eric Balchunas, commented on the early success of Bitcoin ETFs, highlighting their extraordinary performance, with the total trading volume reaching nearly $10 billion in the first three days. At 11:59 a.m. Eastern Time on Tuesday, Bloomberg’s senior ETF analyst, Eric Balchunas, commented on the trading volume. He noted a “dropoff rate” similar to that of BITO, describing BITO as “the most successful organic launch in ETF history.” Meanwhile, bitcoin prices remained rangebound since the ETFs launched, with BTC down 1.2% on Jan. 17, 2024.
Later in the evening, Balchunas highlighted the impressive performance of the ten-spot BTC ETFs over the three-day run, reaching nearly $10 billion. “Let me put into context how insane $10b in volume is in the first 3 days,” Balchunas said. “Today, they did a COMBINED $450m in volume. The best one did $45m. And many have had months to get going. IBIT alone is seeing more activity than the entire ’23 Freshman Class.”
Bitcoin’s Prospects Brighten in 2024 with ETF Approval and Upcoming Halving
2024 is poised to be a pivotal year for bitcoin as significant developments, including SEC approval for a spot bitcoin ETF and an upcoming halving event in April, promise to reshape the cryptocurrency’s supply-and-demand dynamics. John Stec, a strategist at Global X, predicts these changes will likely drive the price of bitcoin higher.
The recent SEC approval for a spot bitcoin ETF marks a milestone, opening doors for a wave of new investors seeking exposure to bitcoin in their traditional investment accounts. This move simplifies access, allowing investors to bypass crypto exchanges and utilize a familiar investment vehicle—the ETF. On the supply side, bitcoin’s scarcity is set to increase with the upcoming halving event scheduled for April 2024. During this event, the reward for Bitcoin miners will be halved, reducing the rate of new Bitcoin issuance from 6.25 to 3.125.
Bitcoin has experienced a remarkable 52% compound annual growth rate since previous halving events, such as on May 11, 2020, when 12.5 BTC was reduced to 6.25 BTC.
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