Grayscale’s ETF witnessed an outflow of $579 million, respectively.
Bitcoin dropped about 10 percent from its peak after the ETF launch.
Bitcoin experienced a substantial correction following the approval and listing of the much-hyped 11 spot Bitcoin exchange-traded funds (ETFs) in the United States. At one point on Friday, the cryptocurrency's value decreased by approximately 10 percent, falling from the previous day's peak of $49,000 to below $42,000. However, it has since rebounded and is currently trading at around $42,700 at the time of writing.
Disappointing Demand for Bitcoin ETFs
Why did the market go in the other direction despite the massive anticipation for Bitcoin ETFs? Even experts previously anticipated that the ETFs would ease the entry barrier for retail and institutional investors to get crypto exposure directly from their brokerage accounts.
Although it has been only two days since the 11 Bitcoin ETFs have traded on the US exchanges, the numbers have been disappointing.
The ten newly listed Bitcoin ETFs attracted only $1.4 billion in new funds within two days. Despite the anticipation surrounding their launch, none of the recently introduced Bitcoin ETFs achieved top rankings among US ETFs based on their initial success.
Along with the poor inflows, Grayscale’s Bitcoin ETF, which was converted from the Grayscale Bitcoin Trust, witnessed an outflow of $579 million, and the previously existing BITO futures ETF endured $151 million in outflows. Considering these figures, the two-day net inflows in the Bitcoin ETFs are only $652 million, while the net spot Bitcoin ETF inflows was at $819 million.
The Hype Could Not Pump New Monies
Although the industry created the hype around the US Bitcoin ETFs, such instruments were already available in several other countries. However, the capital market size of those countries is not comparable to that of the US.
Canada launched the Purpose Investments Bitcoin ETF in February 2021, and within the first two days of trading, the Canadian Bitcoin ETF accumulated assets under management (AUM) totaling $421 million. Meanwhile, the Bitcoin ETFs launched by the two financial giants, BlackRock and Fidelity, currently boast AUMs of $498 million and $422 million, respectively.
Interestingly, the Canadian Bitcoin ETF charges 1.5 percent in fees, while the US one is taking an economical approach, with the lowest fees being 0.2 percent (excluding conditional fee waivers).
After the two performances of the US Bitcoin ETFs, the long-term predictions of the inflows appeared to be long-shots. Bloomberg predicted a $4 billion inflow on the first day and $50 billion by the year's end, while analysts at Standard Chartered were more bullish, eying $100 million by the end of 2024.
Meanwhile, the stock price of the largest US Bitcoin exchange, Coinbase, is plunging about 30 percent from December’s peak. On last Friday’s trading session alone, Coinbase stock declined 7.35 percent, shedding one more percent-point in after-hours trading.
Bitcoin experienced a substantial correction following the approval and listing of the much-hyped 11 spot Bitcoin exchange-traded funds (ETFs) in the United States. At one point on Friday, the cryptocurrency's value decreased by approximately 10 percent, falling from the previous day's peak of $49,000 to below $42,000. However, it has since rebounded and is currently trading at around $42,700 at the time of writing.
Disappointing Demand for Bitcoin ETFs
Why did the market go in the other direction despite the massive anticipation for Bitcoin ETFs? Even experts previously anticipated that the ETFs would ease the entry barrier for retail and institutional investors to get crypto exposure directly from their brokerage accounts.
Although it has been only two days since the 11 Bitcoin ETFs have traded on the US exchanges, the numbers have been disappointing.
The ten newly listed Bitcoin ETFs attracted only $1.4 billion in new funds within two days. Despite the anticipation surrounding their launch, none of the recently introduced Bitcoin ETFs achieved top rankings among US ETFs based on their initial success.
Along with the poor inflows, Grayscale’s Bitcoin ETF, which was converted from the Grayscale Bitcoin Trust, witnessed an outflow of $579 million, and the previously existing BITO futures ETF endured $151 million in outflows. Considering these figures, the two-day net inflows in the Bitcoin ETFs are only $652 million, while the net spot Bitcoin ETF inflows was at $819 million.
The Hype Could Not Pump New Monies
Although the industry created the hype around the US Bitcoin ETFs, such instruments were already available in several other countries. However, the capital market size of those countries is not comparable to that of the US.
Canada launched the Purpose Investments Bitcoin ETF in February 2021, and within the first two days of trading, the Canadian Bitcoin ETF accumulated assets under management (AUM) totaling $421 million. Meanwhile, the Bitcoin ETFs launched by the two financial giants, BlackRock and Fidelity, currently boast AUMs of $498 million and $422 million, respectively.
Interestingly, the Canadian Bitcoin ETF charges 1.5 percent in fees, while the US one is taking an economical approach, with the lowest fees being 0.2 percent (excluding conditional fee waivers).
After the two performances of the US Bitcoin ETFs, the long-term predictions of the inflows appeared to be long-shots. Bloomberg predicted a $4 billion inflow on the first day and $50 billion by the year's end, while analysts at Standard Chartered were more bullish, eying $100 million by the end of 2024.
Meanwhile, the stock price of the largest US Bitcoin exchange, Coinbase, is plunging about 30 percent from December’s peak. On last Friday’s trading session alone, Coinbase stock declined 7.35 percent, shedding one more percent-point in after-hours trading.
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
Wall Street Bitcoin Miner’s Net Loss Surges over 90% in Q3 2024
FMLS:24 | Shaping the Next Era of Financial Evolution
FMLS:24 | Shaping the Next Era of Financial Evolution
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FMLS:24 | Shaping the Next Era of Financial Evolution
FMLS:24 | Shaping the Next Era of Financial Evolution
Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
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Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
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FM's Andrea Badiola Mateos at LSEG's Cyprus event
FM's Andrea Badiola Mateos at LSEG's Cyprus event
FM's Andrea Badiola Mateos at speaking in a panel discussion at LSEG's Cyprus event
FM's Andrea Badiola Mateos at speaking in a panel discussion at LSEG's Cyprus event
The Role of PAMM, MAM & Copy Trading in Business Growth Strategies | Webinar
The Role of PAMM, MAM & Copy Trading in Business Growth Strategies | Webinar
The copy trading market is projected to double in size, growing from $2.2 billion to $4 billion by the end of this decade. In light of this, brokers and financial institutions are increasingly adopting PAMM, MAM, and Copy Trading solutions to scale operations and drive profitability. In this insightful webinar, Sergey Ryzhavin, Product Owner at B2COPY, outlines the advanced features of the B2COPY platform, showcasing how it enhances Copy Trading, PAMM, and MAM performance. Sergey also explores strategies for using these tools to attract new clients, improve customer engagement, and create additional revenue streams.
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The copy trading market is projected to double in size, growing from $2.2 billion to $4 billion by the end of this decade. In light of this, brokers and financial institutions are increasingly adopting PAMM, MAM, and Copy Trading solutions to scale operations and drive profitability. In this insightful webinar, Sergey Ryzhavin, Product Owner at B2COPY, outlines the advanced features of the B2COPY platform, showcasing how it enhances Copy Trading, PAMM, and MAM performance. Sergey also explores strategies for using these tools to attract new clients, improve customer engagement, and create additional revenue streams.
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Join us at FMLS:24 to connect with global institutional brokers. Secure your spot today! #fmls24
Join us at FMLS:24 to connect with global institutional brokers. Secure your spot today! #fmls24