In the first three days of trading since the approval of spot Bitcoin exchange-traded funds (ETFs), net inflows approached $1 billion, equivalent to around 21,000 BTC at the current price of $42,600. Notably, BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund led the way in accumulating bitcoin, while Grayscale’s Bitcoin Trust saw substantial outflows following its conversion to an ETF.
Despite Grayscale’s sizable exits, the overall industry inflow remained robust. The recent approval of BTC ETFs by the U.S. Securities and Exchange Commission marked a significant shift, with Grayscale’s closed-end fund transforming into an ETF along with new products from BlackRock.
However, GBTC holders faced a dilemma as the ETF version retained a management fee of 1.5%, still higher than its competitors. Additionally, the conversion eliminated the fund’s discount to net asset value (NAV), prompting some investors to sell. Nevertheless, the influx of new money into ETFs overshadowed these concerns.
Bitcoin’s price action during the week settled in the $42,000-$43,000 range, experiencing a modest decline of just over 1% in the past 24 hours. The debate now centers on whether the Bitcoin ETF launch can be deemed a success, with differing opinions on the impact of price fluctuations and the substantial selling from GBTC.
While critics point to a nearly 10% decrease in Bitcoin ‘s value since the launch, proponents highlight the impressive $10 billion trading volume for the new ETFs in the first three days. The success of these products contrasts sharply with the overall performance of 500 ETF launches in 2023, which generated only $450 million in volume throughout the entire year.
The final verdict on the Bitcoin ETFs remains uncertain, as the market’s future price movements will likely influence opinions. The potential for Bitcoin to surpass $50,000 and challenge its all-time high above $65,000 could determine whether these ETFs are ultimately considered a major success or face criticism from those advocating a “bust.”
