In a landmark development for the cryptocurrency industry, Bitwise, the crypto asset manager, reported a significant influx of $240 million into its spot bitcoin exchange-traded fund (ETF) on the first day of trading. This marked the highest inflow among the 10 spot bitcoin ETFs that commenced trading on Thursday, following the U.S. Securities and Exchange Commission’s (SEC) approval.
The SEC’s decision granted approval to 11 spot bitcoin ETFs, including offerings from prominent entities like BlackRock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, and ARK 21Shares Bitcoin ETF. This breakthrough comes after a decade-long struggle between the SEC and the digital asset industry.
On the inaugural trading day, a substantial $4.6 billion worth of shares exchanged hands across all the newly approved products, as per data from LSEG on Thursday. Notably, Bitwise’s reported figure could not be immediately verified by Reuters. The trading activity was dominated by industry giants such as Grayscale, BlackRock, and Fidelity, according to LSEG data.
This series of ETF approvals represents a significant turning point for the cryptocurrency market, testing the potential acceptance of digital assets as mainstream investments, despite lingering perceptions of their inherent riskiness among some professionals. The market closely monitors the inflows and trading dynamics during the initial days of these ETFs.
In 2021, the ProShares Bitcoin Strategy ETF (BITO), the first bitcoin futures ETF approved by the SEC, attracted $1 billion in assets within its initial days of trading. Anthony Rousseau, Head of Brokerage Solutions at TradeStation, noted that achieving similar first-week performance would be a notable success, especially considering the current market cycle.
The approval granted Grayscale the ability to convert its existing bitcoin trust into an ETF, instantly creating the world’s largest bitcoin ETF with over $28.6 billion in assets under management. Despite its significant size, the Grayscale Bitcoin Trust witnessed $95 million in outflows on Thursday, according to an insider source.
SEC Chair Gary Gensler emphasized in a statement on Wednesday that the approvals do not signify an endorsement of bitcoin, characterizing it as a “speculative, volatile asset.” The regulatory green light, however, sparked intense competition among issuers vying for market share.
Franklin Templeton responded by slashing the fee for its bitcoin ETF to 0.19%, the lowest in the market, and waived fees entirely on the first $10 billion in assets under management until August. In a competitive move, Valkyrie, after the debut of its ETF on Thursday, further reduced its fees to 0.25%. The Valkyrie Bitcoin ETF reported $29.44 million in inflows on its first trading day, as per the company’s announcement.
Valkyrie CEO Leah Wald, reflecting on the market close on Thursday, characterized it as “a good successful trading day,” underscoring the optimism and active participation in this new phase of cryptocurrency investment.
