In an extraordinary inaugural performance, the initial U.S. ETFs providing direct exposure to the world’s largest cryptocurrency achieved unprecedented trading volumes, signifying a major milestone in the financial sector. LSEG data reveals that approximately $4.6 billion worth of trades occurred in the new US spot Bitcoin ETFs on their inaugural trading day. Showcasing robust investor interest and highlighting the cryptocurrency’s potential growth in mainstream investment landscapes.
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Bitcoin Trust (GBTC)
The Grayscale Bitcoin Trust (GBTC), transitioning into an ETF from a trust. Emerged as the most actively traded ETF on its debut. Amassing a remarkable $2.3 billion in trading volume. Following closely were the iShares Bitcoin Trust (IBIT) with about $1 billion and the Fidelity Wise Origin Bitcoin Trust (FBTC) with $685 million. The ARK 21Shares Bitcoin ETF (ARKB) and Bitwise Bitcoin ETF (BITB) secured noteworthy trading volumes of over $278 million and approximately $122 million, respectively, on the first day.
Initial Bitcoin Futures Fund
This staggering trading activity surpasses the initial Bitcoin futures fund introduced in 2021. Which recorded nearly $1 billion in turnover during its inaugural day. The sustained momentum is expected to persist in the coming days. Fostering increased participation from institutional and retail investors in the cryptocurrency market.
The launch of spot Bitcoin ETFs simplifies investors’ access to Bitcoin without direct ownership. Potentially legitimizing Bitcoin for mainstream investors and creating a more accessible avenue for investment. Consequently, this development may attract a fresh influx of capital into the cryptocurrency market. Positioning spot ETFs as a transformative force for cryptocurrency investors.
Investor Protection
The approval of the 11 ETFs follows a prolonged history of rejections by the SEC, citing concerns related to market manipulation, custody issues, and insufficient investor protection. Over the years, the SEC has rejected more than 30 similar applications.
Now, let’s explore the individual ETFs in detail:
Grayscale Bitcoin Trust (GBTC)
As the world’s largest Bitcoin ETF, Grayscale Bitcoin Trust charges an annual fee of 1.50% and passively holds actual Bitcoins through the Custodian, Coinbase Custody.
iShares Bitcoin Trust (IBIT)
Enabling investors to access Bitcoin within a traditional brokerage account, iShares Bitcoin Trust charges 25 basis points (bps) in annual fees. However, the fee is set to be 0.12% for the first 12 months or on the first $5 billion in assets.
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“This data underscores considerably stronger profitability in the mining sector compared to challenges experienced in 2022 and part of 2023.”
In approximately six months, Bitcoin undergo a “halving,” reducing the new bitcoins awarded to miners by half. Satoshi Nakamoto introduced this event in 2009 as an anti-inflationary measure. Occurring roughly every four years, the lead-up to halvings traditionally proves the most profitable time for crypto investors. “Buying bitcoin six months before a halving and selling 18 months after has historically outperformed a ‘buy and hold’ strategy,” affirms the analyst.
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