Investors Pour $4.7B into Spot Bitcoin ETFs on First Day

Investors hungry for simplified crypto trading embraced spot bitcoin ETFs, pouring billions into the new product on their first day of trading today even as the morning’s price gains evaporated. 

More $4.7 billion traded in the 11 new exchange-traded funds as of market close, according to Bloomberg data. Leading the trading was the Grayscale Bitcoin Trust (GBTC), which traded $2.33 billion, followed by BlackRock’s iShares Bitcoin Trust (IBIT), with $1.04 billion traded.  

Trading topped the $4 billion in first-day volume predicted by analysts including Bloomberg’s James Seyffart, and beat the nearly $1 billion that ProShares Bitcoin Strategy ETF (BITO), the first bitcoin ETF, pulled in its first day in 2021. That fund traded bitcoin futures. 

“It’s been a long and arduous road,” Ophelia Snyder, whose firm 21.co teamed with Ark Investments to launch the ARK 21Shares Bitcoin ETF (ARKB), said on an etf.com webinar today. “This is just the beginning.” 

Heavy trading followed Wednesday’s historic approval by the Securities and Exchange Commission of a spot bitcoin exchange-traded fund after more than a decade of issuers pushing the regulators to grant permission. The SEC had denied multiple applications, ruling the funds didn't sufficiently protect against fraud. The SEC’s view appeared to change after losing a key court battle with Grayscale Investments and as applicants promised security measures to safeguard investors. 

Spot Bitcoin ETF Prices Decline 

Despite the big money flowing into the funds, prices declined. While bitcoin was little-changed at $46,570, according to Coindesk, BlackRock’s IBIT lost 4.7% to $26.63, according to Yahoo Finance and ARKB fell 6.5% to $46.76. The Grayscale Bitcoin Trust ETF which converted from a trust into a bitcoin ETF and has $28.6 billion in assets, gained less than 1%. 

While the approval was cheered by many investors, others displayed a leeriness toward the digital currency ETFs. Asset managers including Vanguard Group and State Street Corp., ETF issuers without spot bitcoin funds, as well as Bank of America Inc. are declining to permit trading of the crypto funds, according to reports. 

SEC Chairman Gary Gensler also criticized crypto, shortly after the agency he leads approved the ETFs.  

“We did not approve or endorse bitcoin,” Gensler wrote in a statement. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto,” Gensler said.  

Other approved funds include the Bitwise Bitcoin ETF (BITB); the Valkyrie Bitcoin Fund (BRRR); the Invesco Galaxy Bitcoin ETF (BTCO); the WisdomTree Bitcoin Fund (BTCW); the Franklin Bitcoin ETF (EZBC); the Fidelity Wise Origin Bitcoin Fund (FBTC) and the VanEck Bitcoin Trust (HODL).