Spot Bitcoin ETF Volume Exceeded $4.5 Billion On The First Day Of Trading

A number of brand-new Bitcoin (BTC) exchange-traded funds (ETFs) saw their first day of trading commence with great success, with the ETFs from BlackRock, Grayscale, and Fidelity leading the pack in overall volumes. However, one issuer's start wasn't what was anticipated.

According to Yahoo Finance data, BlackRock's Bitcoin ETF, the iShares Bitcoin Trust (IBIT), handled slightly over $1 billion in volume, or 22% of the group's total volume, making it the best-performing of the recently listed funds.

Fidelity's spot Bitcoin ETF trailed closely behind, with trading volume on day one of about $685 million.The Grayscale Bitcoin Trust (GBTC), an ETF offered by Grayscale, recorded $2.2 billion in total volume.

Source: Yahoo Finance

Trading for Hashdex's BTC ETF did not begin on January 11. The "DEFI" fund from Hashdex is still only trading as a futures-based ETF, despite the fact that the US Securities and Exchange Commission accepted Hashdex's 19b-4 filing, allowing its spot ETF product to be listed on US stock exchanges. However, the SEC did not make its Form S-1 effective. Additionally, the business released an updated statement clarifying that the fund did not yet have any Bitcoin holdings in its portfolio.

The trading volume does not fully reflect the proportion of trading activity that was spent buying versus selling because it includes both inflows and outflows.

The bulk of trading activity for GBTC, according to senior Bloomberg ETF analyst Eric Balchunas, was likely selling as investors moved out of the fund and into more recent, lower-cost offerings like the corresponding ETFs from BlackRock and Fidelity. James Seyffart, a colleague, held the same opinion.

With over $2 billion in trading volume on the day, the ProShares Bitcoin Strategy ETF saw record-breaking trading activity as well.

Additionally, it is hypothesized that this will mostly consist of selling as investors switch from exposure to Bitcoin through futures to less expensive, less volatile spot exposure.

Cane Macro investment manager Timothy Peterson calculated that the buying activity in the ETFs will require the purchase of about 47,000 Bitcoin, which is currently valued at $2.1 billion, on the spot market.

According to Balchunas, investors hoping to gain a better understanding of spot inflows and the effect of the ETFs on underlying Bitcoin purchases will probably have to wait until later on January 13.

Bitcoin stays above $45,000

The world’s largest crypto managed to secure strong support at the $45,000 level, after reaching nearly $49,000. However, experts are predicting that the price of Bitcoin may increase since the ETF filings have to be backed by the 47,000 BTC purchase.

However, despite the hype surrounding the ETF approvals, it is still early for a massive BTC inflow, which is backed by a slight increase in the trading volumes charts.

If Bitcoin fails to hold the $45,000 support, the next possible step for the world’s largest crypto is $42,000. On the upside, the next resistance that Bitcoin has to overcome is in the $47,000 region, as Bitcoin tried twice in the past week to secure a spot above the threshold, but both times failed. If Bitcoin manages to consolidate above $47,000, the next target would be $50,000.

Looking at the yearly charts, however, Bitcoin is in an exponential growth pattern, which may turn out bearish if the market oversaturates, especially after the spot ETF approvals. This scenario is likely to occur in the early spring of 2024 since there will be enough demand for Bitcoin in the next couple of months.