Bitcoin exchange-traded funds (ETFs) have purchased over 100,000 BTC worth around $4.1 billion in just the first seven days after launching trading on Jan 11, according to CoinGecko. This amount accounts for over half of the total BTC accumulated by MicroStrategy in the past three years.
BlackRock’s iShares BTC Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) led the purchases, acquiring 37,304 BTC and 29,232 BTC, respectively. They are followed by Bitwise’s Bitcoin ETF (BITB) with 16,451 BTC and ARK 21Shares Bitcoin ETF (ARKB) with 10,630 BTC.
Bitcoin ETF Trading Starts With A Bang
In contrast, Grayscale’s Bitcoin Trust ETF (GBTC), the largest Bitcoin ETF by holdings, has been actively selling BTC since launching. GBTC has dumped 82,526 BTC worth around $3 billion so far. This massive selling is a key driver of Bitcoin’s nearly 20% plunge from over $48,000 on Jan 11th to $38,700 on Jan 23rd. Bitcoin’s price today is $39,911.05 USD, with a 24-hour trading volume of $30,594,693,405 USD. Bitcoin is up 0.71% in the last 24 hours.
Some analysts attribute the GBTC sales to the collapsed FTX exchange liquidating $902 million in GBTC shares. Others point to GBTC’s high 1.5% trading fees, much higher than the 0.2% to 0.4% charged by other ETFs, as incentivizing outflows.
Furthermore, major institutional BTC investors have long anticipated ETFs as a major on-ramp for BTC investment. This early ETF trading data suggests surging institutional demand but highlights the potential for large sellers like GBTC to move markets. As ETF trading matures, it may usher in a new phase for BTC price discovery.
Spot Bitcoin ETFs represent a rapidly growing new source of BTC accumulation. In just seven days, they have added to their coffers over half the BTC that MicroStrategy gathered in three years. With over 100,000 BTC worth billions changing hands, these new regulated vehicles are cementing their role as a force in the crypto markets. Their purchases may aid price recovery, while their sales could spur new volatility.
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Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.
