Bitcoin ETFs Make Historic Debut in the U.S., Market Surge

The U.S. market welcomed the commencement of trading for the first-ever Bitcoin exchange-traded funds (ETFs) on Thursday. This marks a pivotal moment for the cryptocurrency sector, which has been striving for regulatory approval for such financial products for more than a decade.

Investors can now tap into the digital asset without the need to directly purchase, store, or manage it, thanks to Bitcoin ETFs. Distinguished by enhanced transparency, liquidity, and security compared to other crypto investments, these ETFs represent a notable leap forward for the industry.

11 Bitcoin ETFs Get Approved: Fierce Competition Begins

The U.S. Securities and Exchange Commission (SEC) approved 11 Bitcoin ETFs on Wednesday, featuring offerings from industry giants like BlackRock, Grayscale, Valkyrie, and ARK 21Shares. These ETFs track the spot price of bitcoin, engaging in the direct buying and selling of the cryptocurrency rather than dealing with futures contracts or derivatives.

The market response to the ETF launch was robust, propelling Bitcoin to its highest level since December 2021, briefly touching the $49,000 mark. Presently, Bitcoin is trading at $46,680, signaling continued market interest.

Intense competition has arisen among ETF issuers, with a focus on securing market share and investor attention. Several ETFs boast minimal fees, ranging from 0.2% to 1.5%, and some even extend fee waivers for a limited period. For investors prioritizing swift ETF trading, liquidity takes precedence over fees.

All Approved $BTC Bitcoin ETFs & reported fees:

Grayscale $GBTC 1.5%
Hashdex $DEFI 0.9%
Valkyrie $BRRR 0.49%
Invesco $BTCO 0.39%
Wisdom Tree $BTCW0.3%
Franklin $EZBC0.29%
Blackrock $IBIT 0.25%
Fidelity $FBTC0.25%
Vaneck $HODL 0.25%
Ark 21 $ARKB 0.21%
Bitwise $BITB 0.2%

— unusual_whales (@unusual_whales) January 10, 2024

The Grayscale Bitcoin Trust, now the world’s largest Bitcoin ETF with over $28 billion in assets under management, converted its existing Bitcoin trust into an ETF post-SEC approval.

Analysts anticipate substantial inflows into bitcoin ETFs in the upcoming years as more investors embrace cryptocurrency as a viable alternative asset class. Projections range from $10 billion in flows by 2024 to a staggering $80 billion by 2026, with some analysts suggesting $55 billion in inflows over the next five years.

As trading commenced, market participants closely monitored bid-ask spreads, highlighting the difference between buying and selling prices. Smaller spreads, indicating lower trading costs and enhanced efficiency, are expected to attract more attention from traders in this emerging market landscape.

 

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