Spot Bitcoin ETFs saw their first trading day on Thursday, with the biggest story being volume $4.6 billion in transactions, showing healthy growth.
As day two is fast approaching, let’s review what we learned from day one of trading.
Trading volume was strong on Thursday
Spot Bitcoin ETFs saw trading volume reach $4.6 billion on Thursday, with volume mainly concentrated in a select few ETFs.
Grayscale saw the largest trading volume at $2.3 billion, although it has the advantage in available assets under management. BlackRock’s ETF came in second place with $1 billion in trading volume, while Fidelity came in third with $680 million.
In total, 5 ETFs each have trading volume of more than $100 million and 3 ETFs have trading volume of less than $10 million each.
Eric Balchunas, senior ETF analyst said on X:
“By all metrics: volume, number of transactions, capital flows, media coverage, it was a resounding, historic success. And although the platform’s availability is limited. Relax and see this as a multi-year process.”
Wave of interest follows futures-based Bitcoin ETFs, where volume ProShares Bitcoin Strategy ETF (BITO) skyrocketed to an all-time high of $2 billion
Initial data on spot Bitcoin ETF inflows
Although trading volumes are provided in real time, data on inflows into these funds is less frequently published.
According to BitMEX Research, preliminary data shows at least $400 million inflows into some of these funds. It said BlackRock had inflows of $111 million, while Fidelity had $227 million. However, this data excludes many ETFs and is subject to change.
Balchunas estimates the total amount will be about $720 million for the 9 new ETFs, excluding Grayscale and Hashdex. It’s worth noting that Grayscale may see more outflow than inflow, which could reduce the overall number.
On Thursday, JPMorgan said these spot Bitcoin ETFs are not expected to bring in a significant amount of new capital. Instead, they could channel up to $36 billion in inflows from existing crypto instruments, analysts say .
OTC transactions on Coinbase increased dramatically
An interesting takeaway from Thursday is that OTC trading volume on Coinbase, the custody platform for many spot Bitcoin ETFs, has spiked.
Data from CryptoQuant shows Coinbase hits $7.7 billion in OTC trading volume, second highest day in history .
“Received several inquiries about this data. That is the aggregated on-chain trading volume for the Coinbase OTC wallet. It is difficult to know the exact trading volume, but at least we can say that it appears to be approaching recent year highs,” CryptoQuant CEO Ki Young Ju indicates on X.
The role of retail
While spot Bitcoin ETF products are suitable for institutional investors, they are also widely available to retail investors.
Balchunas note there are 700,000 individual trades on spot Bitcoin ETFs. According to Balchunas, this is double that of the Invesco QQQ Trust Series 1 ETF, which has much larger trading volumes. Balchunas said this suggests there is more grassroots action than larger seed investments than Balchunas expected.
Balchunas added that small-scale transactions indicate “retail chaos” from Grayscale Bitcoin Trust.
The ability for retail traders to access these products has been aided by trading apps such as Robinhood, which focus on younger and novice investors. In contrast, Vanguard, the more traditional investment advisor, is refusing to add support for spot Bitcoin ETFs and stated it has no plans to support any crypto products.
Springboard for more ETF-based products
With spot Bitcoin ETFs approved and trading, the next question is what other products will be built on top of them.
We have a recommendation for such a product. On Thursday, Grayscale filed for a Bitcoin Covered Call ETF that seeks to generate income from a position in GBTC.
“Grayscale Bitcoin Trust Covered Call ETF seeks to provide and deliver current income while providing participation in the price return of the Grayscale Bitcoin Trust,” according to Form N-1A issued by on Thursday afternoon.submit
According to the filing, the fund will not invest directly in digital assets.
“And so it all began…” Nate Geraci, president of The ETF Store, said in a post on X. “Actively manage GBTC exposure and buy/sell call and put options using GBTC as a reference asset. See all variations of Bitcoin spot ETFs.”
“The Spaghetti Cannon ETF has officially taken effect. These huge first day numbers will inspire all kinds of cornered product variations…”, Balchunas added.
