BTC ETFs Day 1 By The Numbers
The launch saw record-breaking volumes, and likely healthy inflows to the underlying spot market.
Spot ETFs have been one of the most hotly-anticipated developments in Bitcoin's 15-year history. So, how did the reality measure up to the hype?
A Massive First Day
First up, it was a huge Day 1, with $4.6 billion trading volume across the 11 different products: A record for any ETF. An incredible $1.2 billion was traded in the first 30 minutes alone.
A significant percentage of that was selling, though, as investors exited their GBTC positions. (GBTC's fees are 1.5%, a full 1% higher than most of the other ETFs, and many traders had bought the fund at a steep discount earlier in the year as an arbitrage play).
New Money Into BTC?
Overall inflows (excluding GBTC, since we can assume inflows were close to zero) were $2.2 billion. BlackRock's IBIT, Fidelity's FBTC, and Ark's ARKB took the majority of that.
While that sounds like a lot, it hasn't resulted in a rise in the underlying market just yet, for various reasons, potentially including: GBTC sells cancelling out the effect of buys; delays in settlement; providers striking OTC deals to avoid having to chase the price higher with market buys; providers having a "float" to facilitate initial trading; and regular traders selling the news. As Timothy Peterson commented:
Today's volume required an estimated 47,000 #Bitcoin to be purchased on the spot market. By comparison, an average 500,000 Bitcoin are traded daily. Today's activity had minimal impact on liquidity.
Net, What Happened?
It will be a little while longer before we have the data to understand what really happened here. The dollar value of GBTC trades (all sales) was roughly equal to the inflows for the other ETFs. One reading is that money simply moved from GBTC to other ETFs, but that's likely a little simplistic. (It does not, for example, take into account rotation from futures ETFs into spot.)
Retail Vs Institutions
One interesting fact is that regular investors made up a surprisingly large percentage of buyers. Overall, there were 700,000 individual trades (buys and sells), indicating a significant amount of retail activity. Institutions move more slowly, so this is perhaps understandable with hindsight.
Another noteworthy point is the high number of GBTC trades: A "retail stampede" out of this fund.
Futures Still In Fashion
The BITO futures BTC ETF had its best day ever, with $2 billion volume. Some of that may be down to traders selling BITO to gain exposure to physical BTC (representing inflows into the underlying market). But it's also likely that BITO is being used as a hedge for market makers, since it can be bought with no delay when a customer places an order for a spot ETF.
Coinbase: Another Winner
Coinbase's OTC desk was working overtime yesterday, with over $7 billion in BTC sales.
Overall, Coinbase is going to be one of the chief beneficiaries of the ETFs, since it's the custodian of choice for nine of them. Coinbase's share price has staged an impressive recovery over the past year, though has corrected from its December high.
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