Key Points
- Spot bitcoin ETFs have significantly exceeded expectations in their first two months of trading.
- The ETFs have driven a bullish bitcoin market and legitimized digital assets as an asset class.
Spot bitcoin ETFs have been trading for two months and have already made a significant impact on the cryptocurrency industry.
They have outperformed predictions in every metric, from the amount of inflows to the number of bitcoin acquired and high trading volumes.
The Success of Spot Bitcoin ETFs
These ETFs have rejuvenated the crypto industry and fostered a bullish bitcoin-led market. GSR Research Analyst Brian Rudick stated that the U.S. spot Bitcoin ETFs have had over $10 billion of inflows in just two months.
This is close to what was expected for the first year. Rudick also mentioned that these ETFs have been a major factor in increasing BTC’s price from around $25k to $70k.
ETFs and the Bitcoin Market
The ETFs have also achieved significant milestones. They have attracted an additional 180,000 bitcoin on top of the bitcoin that Grayscale’s Bitcoin Trust held when it was converted to an ETF.
This, along with the price rise, has nearly doubled the value held in ETFs from $28.9 billion on the first day to $56.6 billion just two months later. Spot bitcoin ETFs now hold a total of 802,000 bitcoin, representing 4% of the circulating supply.
Scott Johnsson, general partner at Van Buren Capital, said that the daily net inflows have been extraordinarily strong, exceeding his expectations.
The demand for bitcoin from the ETFs, along with additional demand from MicroStrategy, has resulted in bitcoin’s market cap overtaking that of silver. The ETFs have also captured 90% of the market share between them and futures-based bitcoin ETFs.
Matthew Sigel, head of digital assets research at VanEck, one of the ETF providers, explained that the high volumes come during the 3-4pm NY close, which is now the most liquid part of the day.
Future Developments
Despite the success of ETFs, they are not yet available on every platform. However, Sui Chung, CEO of CF Benchmarks, believes that in the next month, larger wealth management platforms could onboard the ETFs, opening up another source of capital.
Chung also suggested that these ETFs, with their high trading volumes and assets under management (AuMs) exceeding $10bn, might be considered by pension funds. However, this would depend on the discretion and investment philosophy of the investment teams and trustees.
