Today was the first day of spot Bitcoin ETF trading, which certainly delivered the promised excitement. Let’s quickly take a look at how the market performed. 👀
The initial flows into these ETFs were expected to keep upward pressure on Bitcoin prices in the near term. And that happened briefly after the open, with Bitcoin jumping above 49,000 before quickly falling alongside other crypto-related stocks. As it happened, the approval did turn out to be a “sell the news” type event. 📉
Regardless of what happened today, longer-term investors are ultimately focused on how much these ETFs capture in “sticky” AUM during this initial hype. This graphic from Callie Cox summarizes the day-one trading volume of the ETFs, with many speculating a portion of the volumes came from people selling Grayscale’s product and moving into lower-fee products like BlackRock’s. 💰
Regulators and market participants are also watching to see if these products operate in the way they are designed to. Any hiccup in pricing/tracking, liquidity, or other factors that impact trading could materially hurt confidence in these products. The initial inflows are causing the ETFs to trade at a premium to their net asset values. However, that’s expected to smooth out in the coming weeks as demand slows and the different products establish baseline trading levels. 🕵️♂️
Today was exciting, but the spot Bitcoin ETFs (and crypto products in general) still have many tests ahead of them as they attempt to capture a meaningful share of the traditional finance market.
Meanwhile, some crypto firms want to capitalize on the market’s recent momentum. The issuer of the USDC stablecoin, Circle, announced it has confidentially filed paperwork with the Securities and Exchange Commission (SEC) for an initial public offering (IPO). 📝
The ETF approval also attracted some “unique” predictions, including one from Cathie Wood, who sees Bitcoin reaching $1.5 million by 2030. That’s a 50% increase from her last prediction of $1 million, with the SEC’s greenlight of crypto products leading to widespread industry adoption. ₿
And finally, some organizations are choosing not to offer these products to their clients at all. Vanguard is among them, with users pointing out early in the day that they could not place buy or sell orders for spot Bitcoin ETFs on the platform.
Kate Rooney shared the statement below from Vanguard, which essentially explained the products do not align with their investor offerings. The company similarly stopped offering leveraged and inverse products in 2019 because they’re meant to be used as short-term trading tools, not buy-and-hold investments. Others, like JPMorgan, are offering them but with additional warnings. 🚫
We’ll have to see how things develop in the coming days and weeks. But for now, it appears the first day of trading went smoothly. While prices may have settled lower on the day, we’ll certainly chalk this up as a win for the crypto proponents. 👍