Spot Bitcoin ETF Surpasses $4 Billion in Volume on First Day of Trading

Initial trading volumes indicate an optimistic future for Bitcoin, which has remained stable despite many claiming that its approval was a “sell-off news” event.

The 11 newly approved spot bitcoin ETFs traded more than $4 billion on their first day of trading, with Grayscale, BlackRock and Fidelity Investments accounting for the bulk of the volume.

The U.S. Securities and Exchange Commission’s (SEC) approval of 11 spot bitcoin ETFs on Jan. 11, after years of rejections due to market manipulation concerns, gives institutions their first access to the flagship cryptocurrency. Bitcoin mining

Initial trading volumes indicate an optimistic future for Bitcoin, which has remained stable despite many claiming the approval was a “sell-off news” event.

BlackRock Leads New Capital Inflows

ETFs from industry leaders BlackRock and Fidelity Investments had a strong first day. The two ETFs saw trading volumes of $942 million and $628 million, respectively.

They also accounted for the lion’s share of early and daily trading volume, especially in terms of new capital inflows. Inflows into the 10 new ETFs (excluding GBTC) will go directly to buying more bitcoin.

Grayscale’s Bitcoin Trust (GBTC), which has now been converted to an ETF, leads the way in terms of volume, at around $1.9 billion. However, given its status as a conversion fund, it is unclear how much of this volume represents new capital inflows.

Eric Balchunas, a senior ETF analyst at Bloomberg, speculates that much of the volume in shades of gray could represent selling activity, in contrast to possible new capital inflows into the newly launched BlackRock and Fidelity funds.

The ARK 21Shares Bitcoin ETF traded $148 million, while other new entrants such as Franklin Templeton and Valkyrie all traded less than $10 million in the first few hours.

“Unreal numbers”

The Spot BTC ETF, which allows investors to speculate on the price of bitcoin without directly owning the digital currency, is expected to attract significant capital inflows in the coming weeks. Litecoin Miner

Balchunas described the trading volume as “unrealistic first-day numbers”. Meanwhile, analyst James Seyffart said the volumes were largely driven by capital inflows, with the notable exception of GBTC in shades of gray.

On January 11, Coinbase’s over-the-counter (OTC) bitcoin trading volume reached a record high of $7.7 billion. This surge coincided with a significant increase in cryptocurrency exchange trading volume, which reached $52 billion, the highest level since March 2023.1 The OTC Bitcoin trading volume reached $7.7 billion on January 11th, which is the highest level since March 20th.

Standard Chartered recently predicted that these ETFs could generate between $50 billion and $100 billion in revenue for bitcoin in 2024. These new inflows, combined with a halving, could push BTC to $200,000 by the end of 2025, the bank said.

BTCUSD Hourly Level Chart Source|TRADINGVIEW

Market Summary

As of writing, the global cryptocurrency market is valued at $1.77 trillion with a 24-hour volume of $131.89 billion. Bitcoin currently dominates at 51.33%.