Bitcoin ETF Trading: First Day of Spot Bitcoin ETF Trading At Wall Street, Here’s How It Went

Bitcoin ETF Trading Receives Strong Response on Day 1, Here’s How It Went

January 12, 2024

Bhushan Akolkar

Senior Journalist

Expertise : Cryptocurrency, Blockchain, Macro Finance

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets.   He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

Read full bio

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

Breaking: Susquehanna International Holds $1.3B in 10 Bitcoin ETFs, $1B in GBTC

The inaugural day of trading for spot Bitcoin ETFs on Wall Street was marked by significant activity, with Grayscale leading the way by recording over $4 billion in trading volumes on its debut. Bitcoin’s entry into the ETF market made history with an unprecedented level of trading on its launch day.

$4.6 Billion Bitcoin ETF Shares Exchange Hands

Almost a dozen Bitcoin ETF funds, including those from major investment players such as BlackRock Inc. and Fidelity Investments, had an impressive debut, with a flurry of activity resulting in approximately $4.6 billion worth of shares traded on the first day. Advocates within the industry view these ETFs as a pivotal launching pad for wider adoption by everyday investors and anticipate them serving as a catalyst for further market gains.

Bloomberg’s ETF strategist, Eric Balchunas, reported that a total of 700,000 individual trades were executed today involving the 11 spot ETFs. To provide context, this figure is twice the number of trades observed for $QQQ, although the latter experiences more substantial dollar volume due to larger institutional involvement. Balchunas noted that the increased grassroots action, as opposed to significant seed purchases, exceeded his expectations and is viewed positively.

All told there were 700,000 individual trades today in and out of the 11 spot ETFs. For context, that is double the number of trades for $QQQ (altho it sees much bigger $ volume bc bigger fish use it) So a lot more grassroots action (vs big seed buys) than I expected which is… pic.twitter.com/syUGfjHQpr

— Eric Balchunas (@EricBalchunas) January 11, 2024

Balchunas further added: “Easily the biggest splash in ETF history for a first day. No matter where you look, it’s superseded expectations.”

Thursday’s ETF launches witnessed notable milestones, including record-breaking activity with the Grayscale Bitcoin Trust achieving the largest-ever first-day turnover for an ETF, reaching $2.3 billion. It’s worth noting that Grayscale’s product, with a trust structure since 2013, had a substantial head start with nearly $27 billion in assets.

Furthermore, even newly launched ETFs, not converted from existing funds, experienced historic trading volumes. BlackRock’s iShares Bitcoin Trust, denoted as IBIT, recorded $1 billion changing hands, marking the fifth-largest ETF launch on record. However, it’s crucial to acknowledge that trading volume alone doesn’t provide a comprehensive overview of the buying or selling nature of investor inflows.

Challenges Ahead

The long-term success of the ETFs hinges on investors’ seamless accessibility, which remains a current challenge. Vanguard Group Inc.’s brokerage arm has opted not to facilitate trading for these ETFs, and Merrill Edge, operated by Bank of America Corp., is still evaluating its stance on offering this service. In contrast, some platforms are more enthusiastic about embracing these new investment products. Robinhood Markets Inc.’s CEO, Vlad Tenev, expressed intentions to list the funds on their platform as quickly as possible.

Despite the enthusiasm, uncertainties linger. The timing of major distribution platforms incorporating spot Bitcoin products into their offerings remains unclear, mirroring the uncertainty typical of any new ETF.

Fee competition, common in the $8 trillion ETF arena, intensified even before the launch of spot Bitcoin ETFs. Notably, issuers like BlackRock, Ark Investment Management, and Invesco preemptively reduced their costs leading up to the regulatory approval on Wednesday. The simultaneous launch of all these products on the same day, eliminating potential first-mover advantages, contributed to an intensified race-to-the-bottom on fees. To stand out, several firms resorted to fee waivers, offering their ETFs for free during the initial six or twelve months.

The Bitcoin price continues to flirt around $46,000 as it loses the early week momentum.