U.S.-Listed Bitcoin ETFs Drive $4.6 Billion in Trading Volume
Bitcoin exchange-traded funds (ETFs) listed on U.S. exchanges witnessed significant investor interest on Thursday, March 28, as trading volumes surged to $4.6 billion, according to data from LSEG. This surge in trading activity follows the approval of eleven spot bitcoin ETFs by the U.S. securities regulator, marking a historic moment for the cryptocurrency industry.
The approval of these ETFs is an important moment for the crypto community. It is a vital step for digital assets, a test if cryptocurrencies is still perceived as risky by many professionals, or it can gain broader acceptance as an investment. Of all the renowned trading which started on Thursday, BlackRock’s iShares Bitcoin Trust (IBIT.O), Grayscale Bitcoin Trust (GBTC.P), and ARK 21Shares Bitcoin ETF (ARKB.Z) are some of the companies, which are in fierce competition for market share, especially for the crypto market.
Grayscale, BlackRock, and Fidelity are some of the players that are dominating the market right now. Todd Rosenbluth, a strategist at VettaFi, highlighted that the strong trading volumes for the new ETF products, however, he alerted that the competition will unfold over an extended period rather than a single day’s trading.
The green light from the U.S. Securities and Exchange Commission (SEC) for these ETFs came after a decade-long struggle with the crypto industry. While the regulatory approval marks a significant milestone, some executives remain cautious about Bitcoin as a high-risk investment. Vanguard, the largest provider of mutual funds, announced that it has no plans to offer the new batch of spot bitcoin ETFs to its brokerage clients.
SEC Chair Gary Gensler emphasized that the approvals do not constitute an endorsement of bitcoin, labeling it a “speculative, volatile asset.” Nevertheless, the ETF launches had an immediate impact on bitcoin’s price, pushing it to its highest level since December 2021. As of the latest data, bitcoin was trading at $46,303, up 0.77%, while ether, the second-largest cryptocurrency, surged 2.79% to $2597.95.
The regulatory nod has ignited intense competition among ETF issuers, with some slashing fees well below the industry standard to attract investors. Fees on the new bitcoin ETFs range from 0.2% to 1.5%, with several firms offering fee waivers for a certain period or asset volume. Notably, Grayscale converted its existing bitcoin trust into an ETF, instantly creating the world’s largest bitcoin ETF with over $28 billion in assets under management.
Analysts have varying estimates of the potential inflows into spot bitcoin ETFs, with projections ranging from $10 billion to $100 billion. The success of these ETFs will depend on factors such as bid-ask spreads, trading volume, and market participants’ engagement.
Despite the euphoria surrounding the ETF approvals, some analysts remain cautious, citing the broader investment community’s skepticism towards cryptocurrencies. Nonetheless, the approval of bitcoin ETFs could pave the way for more innovative crypto ETFs in the future, potentially including spot ether products.
In related news, Circle Internet Financial, the company behind stablecoin USDC, announced that it had confidentially filed for a U.S. initial public offering, further underscoring the growing mainstream acceptance of cryptocurrencies and related financial products.
