On the first day of trading, the performance was remarkable, with the trading volume of the spot Bitcoin ETF reaching 4.6 billion dollars

Author: BitPush

The first batch of U.S. spot Bitcoin ETFs had a strong start on their debut, with data compiled by Bloomberg showing that the trading volume of the 11 approved ETF products exceeded $4.6 billion on that day.

The Grayscale Bitcoin Trust, converted to an ETF, had a trading volume of approximately $2.3 billion, ranking first, while BlackRock's iShares Bitcoin Trust (IBIT) had a trading volume of over $1 billion, and Fidelity's FBTC exceeded $680 million.

Bloomberg analyst Eric Balchunas stated that there were a total of 700,000 individual buy and sell transactions that day, which is double that of the Invesco QQQ Trust (ticker: QQQ) (QQQ had a larger total trading volume). Balchunas commented, "The enthusiasm shown by retail investors is much greater than I expected, which is a good sign."

Grayscale CEO Michael Sonnenshein described it as "a historic day."

Bloomberg Intelligence ETF analyst Athanasios Psarofagis said, "This is definitely groundbreaking. There is no doubt that the demand for these ETFs will be strong, but the overall numbers are impressive."

Psarofagis added that most of the demand may come from so-called "seed" capital pre-arranged by fund issuers. As more brokerage firms list the funds on their platforms, there may be signs of more organic demand, such as from retail investors or financial advisors.

However, trading volume does not necessarily represent buying or investor inflows, as the way funds settle trades means that net inflows or outflows for the products may not be known until at least Friday. Comparing the $4.6 billion figure with other categories of ETFs is also not very appropriate, as typically only one fund tracking a new asset class starts trading in a day; having more than a dozen similar funds launch simultaneously is unprecedented.

The Grayscale Bitcoin Trust (GBTC) is the largest ETF by trading volume on record, having existed in its trust structure since 2013, with assets nearing $27 billion.

The launch of spot products also propelled the ProShares Bitcoin Strategy ETF (ticker: BITO) to a daily trading volume exceeding $2 billion, setting a new historical high. Analysts stated, "Perhaps some of the funds are redemptions, but I tend to think BITO's liquidity will serve market makers for a while."

Where are the new Bitcoin ETFs traded and listed?

The 11 ETFs are listed on NYSE Arca, Cboe BZX, and Nasdaq. Here is a list of the ETFs traded on each exchange along with their ticker symbols:

• NYSE Arca: Grayscale Bitcoin Trust (GBTC), Bitwise Bitcoin ETF (BITB), and Hashdex Bitcoin ETF (DEFI).
• Cboe BZX: ARK 21Shares Bitcoin ETF (ARKB), Invesco Galaxy Bitcoin ETF (BTCO), VanEck Bitcoin Trust (HODL), WisdomTree Bitcoin Fund (BTCW), Fidelity Wise Origin Bitcoin Fund (FBTC), and Franklin Bitcoin ETF (EZBC).
• Nasdaq: iShares Bitcoin Trust (IBIT) and Valkyrie Bitcoin Fund (BRRR).

Companies such as Robinhood, E*TRADE, Charles Schwab, and Fidelity have supported trading of spot Bitcoin ETFs. Users with brokerage accounts at these firms can purchase spot Bitcoin ETFs. On the Fidelity platform, users attempting to buy shares are reminded that the investment must comply with a "designated investment agreement," which acknowledges that the user is an experienced investor with a higher risk tolerance.

One of the largest fund management companies in the U.S., The Vanguard Group, does not currently support trading of spot Bitcoin ETFs, as the company considers them "highly speculative," "unregulated," and not aligned with its long-term investment philosophy. Customers attempting to purchase BlackRock's IBIT are informed that the transaction cannot be completed. A Vanguard spokesperson stated, "Our long-standing view is that the high volatility of cryptocurrencies is contrary to our goal of helping investors achieve positive real returns over the long term."

Who can withstand the test of time?

Various market makers are competing for customer attention through a fee war. Bitwise, ARK, and WisdomTree are waiving fees for the first six months and/or for $1 billion in assets. Invesco will waive fees for the first six months and/or for $5 billion in assets. iShares will reduce fees for the first 12 months and/or for $5 billion in assets. Valkyrie is waiving fees for the first three months. Fidelity will waive fees until July 31, 2024.

However, whether these 11 funds can maintain long-term momentum remains to be seen.

Cathie Wood, CEO and Chief Investment Officer of Ark Invest, stated in an interview with Yahoo Finance that she expects only 3-4 of the 11 spot Bitcoin ETFs to continue operating in five years. She believes Ark's ETF will be a product that withstands the test of time for three reasons: a mature crypto asset infrastructure and low operating costs; long-term deep research in the cryptocurrency space; and an experienced and proven sales team.

Regarding consolidation, Wood stated, "I don't think all 11 spot Bitcoin ETFs will survive. Some may close, and some may be consolidated into larger companies. More pure-play companies may be acquired by larger participants. I do believe that the process of closures and mergers will reduce these products to three, maybe four, but more likely three."