Baar – We have live trading Spot Bitcoin ETFs in the US, an historical moment. This marks a huge victory for the industry and opens up trillions of investable dollars to the crypto market.
Here is what has happened since the first ETF traded in the US along with our Research Teams’ insights.
Our Findings:
- Bitcoin Spot ETFs had $4.6B in trading volumes on the inaugural day.
- Grayscale, BlackRock, and Fidelity led in trading volumes.
- Bitcoin futures open interest on CME reached an all-time high of $5.4B.
- Digital Asset Investment products received $1.18B in inflows during the week of the ETF approvals.
- Ethereum and other Alt coin market prices surged following the announcement.
Our Insights:
- The announcement created an opportunity for seasoned crypto investors to rotate into Alt coins as the adoption risks significantly diminished.
- The ETHBTC ratio has rallied over +24% showing appetite for the Switch trade.
- BlackRock hints at launching an Ethereum Spot ETF adding to the Alt coin thesis
- Grayscale’s GBTC traders taking advantage of the discount finally take profits – providing selling pressure.
- Investors in GBTC get opportunity to switch to lower fee ETF competitors – contributing to greater trading volumes and not necessarily fresh fiat inflows into ETFs.
The wait is finally over! Crypto investors have been anticipating a Spot Bitcoin ETF approval for almost 12 months in an over-a-decade long battle. Bitcoin’s market price rallied +155% during the course of 2023 in anticipation of the ETF approval.
On the 11th of January 2024 the first 11 Spot Bitcoin ETFs began trading, here are some key market insights from our team:
The Bitcoin price hit $49,000 during the premier day of ETF trading; and subsequently, sold off to $41,500 proceeding the event leaving many investors confused.
However, in the lead up to the event, our CIO of SwissOne Capital, Kenny Hearn, had foreseen this event as a potential opportunity for more experienced investors to rotate from Bitcoin into Ethereum and other Alt coins following the event.
“This is an opportunity for the smart money who bought Bitcoin in early 2023 to offload onto retail participants after profiting over +100%. This is the perfect event to rotate into Alt’s and prepare for the next leg up in digital assets.”
And on “X” here:
He added that potentially a large portion of the volume traded on the day could be attributed to the fact that many existing investors in the Grayscale ETF Trust would use the opportunity to reduce their ETF fees of 1.5% to other ETFs at a fraction of the price (avg. 0.2%).
The ETHBTC ratio has since rallied over +24% with BlackRock’s CEO, Larry Fink, adding fuel to the rally by mentioning his interest in a Spot Ethereum ETF in the coming months.
One of our Investment Analysts at SwissOne, Chris Beamish, added his analysis of ETF flows following the historic event.
“Grayscale’s GBTC had over $26B in Assets Under Management (AUM) on the inaugural day of trading. Many traders had entered into the Grayscale Bitcoin Trust to capitalise on the discount that it was trading at relative to the Bitcoin price in early 2023 in hopes of the eventual conversion to an ETF and a closing of the discount. Therefore, the closing of this position would result in significant selling pressure upon live trading of the GBTC and conversion of the Trust. This would have contributed to the sell-off that occurred.”
Despite the GBTC outflows witnessed, net inflows of fresh fiat amounting to $819M made its way into the rest of the ETFs. This is no small feat as it took the inaugural Gold ETF to reach $1bn in 3 days for trading.
This historic moment for the crypto industry is not to be underestimated as these ETFs are now investable by a pool of over +$6T. The entire crypto market is a mere $1.6T at the time of writing. This significant tailwind coupled with improving macro and fundamental conditions (peak interest rates & Bitcoin halving event in April) are all pointing to a spectacular year for the crypto industry.
Why SwissOne Capital?
SwissOne offers seamless access in to the Crypto Asset ecosystem via traditional market channels. Offering the Top 50 Crypto Assets momentum-weighted as well as Smart Metaverse strategies, SwissOne brings you direct and sensible exposure to this uncorrelated and high growth asset class. Operating with institutional-grade European financial service providers, there is a safe and secure passage from traditional markets into Crypto Assets.
(SwissOne Capital/mc/ps)