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Bitcoin ETFs have been available for a week: here’s how they’re doing
Happy Friday. The crypto industry has spent months pinning its hopes on the long-awaited arrival of Bitcoin ETFs, which would help it emerge from a painful bear market and allow digital assets to take their rightful place in the world of traditional finance. These ETFs finally arrived last Thursday. So, were they a success? An initial wave of marketing manipulation made this difficult to determine, but clear signals are now emerging.
Price-wise, Bitcoin has actually fallen significantly since its launch, but that doesn’t mean ETFs have been a failure. The crisis follows a surge in crypto prices that occurred in anticipation of the SEC’s approval of the new product, so the recent drop reflects an expected “sell the news” moment. Meanwhile, the Bitcoin ETF market is reportedly already more valuable than silver, with BlackRock’s ETF already there. more than a billion dollars all alone.
What comes next is more intriguing. I spoke with Ophelia Snyder, whose 21.co helped put together Ark Invest’s Bitcoin ETF, which was the fourth of 11 new ETFs with $2.7 million in trading volume on Thursday, to get a better idea of where things are going. She argued that much of the early movement came from organic retail trading and that the market could expect much more inflow once financial advisors start recommending Bitcoin ETFs to their clients.
According to Snyder, these advisors are currently able to pick up the phone and fill a client’s Bitcoin stock order, but must assess the market before actively placing them in portfolios. She expects this to happen in the coming weeks and months, leading to an increase in demand – and of course the price. Snyder is obviously not impartial here, but her thesis makes sense.
Another thing that becomes evident a week into Bitcoin ETF trading is which of the 11 newly launched ETFs is gaining significant market share. Although assets under management tell part of the story, this metric can also be misleading to the extent that the size of some funds reflects, in Snyder’s words, a “bring your own assets” strategy, meaning that They tapped into their own capital to help boost their launches. . This is the case of category leaders BlackRock and Fidelity and of BitWise, which was launched with a “seed partner” who invested heavily.
The best way to gauge the early performance of new ETFs is daily trading volume, and on that front, BlackRock and Fidelity also lead with volumes of $17.7 million and $9.7 million on Thursday. BitWise comes next with $2.8 million, just ahead of Ark. Meanwhile, the other new ETFs (except Grayscale, which is an outlier) posted less than 10% of these volumes, raising questions about their long-term viability.
The story continues
The upshot of all this is that the long-awaited Bitcoin ETFs are an early success and, if optimists like Snyder are right, it’s only the beginning.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
This story was originally featured on Fortune.com