Jan 12, 2024 - Economy

Bitcoin ETFs' terribly unsuccessful, terribly huge success

Spot Bitcoin ETF volumes on the first day of trading
Data: Yahoo Finance; Chart: Tory Lysik/Axios Visuals

The first day of trading for bitcoin ETFs has been called both "terribly unsuccessful" and a "terribly huge success."

Why it matters: Judging the Day 1 impact of bitcoin's long awaited moment not only relies on a fuzzy picture, it depends on who you ask about the data.

Zoom in: Parsing the $4.5 billion-plus in total trading Thursday, roughly half took place in Grayscale's converted bitcoin trust, GBTC, CNBC's Crypto Trader host Ran Neuner tweeted just two hours after midnight.

  • According to Neuner, the GBTC action was "majority sales."
  • "Zero new inflows," he claimed in the post, suggesting that existing investors in the old trust were simply moving out of GBTC and into other bitcoin ETFs that offer lower fees.

The other side: Bloomberg's Eric Balchunas said that even if buy/sell volume across all the ETFs launched Thursday was neutral, by all other metrics the fund debuts were a success.

  • "Volume is crucial in attracting big fish, it precedes flows. That's why [it] is just whacky to call [yesterday] a flop," he said before equity markets opened Friday.
  • Balchunas also argued that many brokerage platforms haven't even made the new funds available yet, a process that could take weeks.

State of play: There's a lag in flows data, due to a quirk in how they are accounted for, so some of Thursday's activity won't show up in data until later.

  • Bloomberg data shows $626 million net inflows with the data it has across the 11 funds Friday afternoon. GBTC was at negative $95 million.

The bottom line: Bitcoin ETFs are trading, but they aren't everywhere yet. It may take months, at least, to see where the dollars are accruing.

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