Spot Bitcoin ETFs racked up nearly $10 billion in volume over their first three days of trading, according to Bloomberg's James Seyffart report, with Grayscale, BlackRock and Fidelity occupying over 90 percent of overall spot Bitcoin ETF trading volume.
Out of this total trading volume, Grayscale's GBTC dominated initial trading volume with $5.17 billion, but BlackRock's IBIT quickly rose to $1.99 billion. Fidelity's FBTC also made a solid showing at $1.47 billion.
The ETFs also saw initial net inflows totaling around 21,000 BTC ($894 million at current prices) within this period. BlackRock's iShares Bitcoin Trust (IBIT) surged ahead in the early spot ETF race, accumulating 16,362 Bitcoins, while Fidelity's Wise Origin Bitcoin Fund (FBTC) followed with 12,112.
Outflows from Grayscale's Bitcoin Trust (GBTC), estimated at 25,000 bitcoin, tempered the overall industry gain. However, despite the outflows, the surge of fresh capital into new spot ETFs bolstered overall net inflows for the industry.
Bloomberg's ETF analyst Eric Balchunas predicted BlackRock's IBIT could soon overtake MicroStrategy as the world's biggest holder. Combined inflows into BlackRock and Fidelity's spot ETFs already top $3.1 billion, fueling their ascent.
Let me put into context how insane $10b in volume is in first 3 days. There were 500 ETFs launched in 2023. Today, they did a COMBINDED $450m in volume. The best one did $45m. And many have had months to get going. $IBIT alone is seeing more activity than the entire '23 Freshman… https://t.co/wV1zQFtPW1
— Eric Balchunas (@EricBalchunas) January 16, 2024
Bitcoin prices and future
Bitcoin prices cooled Wednesday after last week's mass spot ETF launch, despite record trading volume. The surge to $49,000, its highest since December 2021, proved short-lived, with prices dipping below $43,000 and currently hovering around $42,615. This slight rebound hasn't erased the 0.46 percent loss from the previous day.
Bitcoin skeptics see the recent price dip of nearly 10 percent and GBTC selling activity as dampeners on the initial excitement surrounding spot ETFs. While net inflows are sizeable, they haven't met the astronomical predictions of some bulls.
"In the medium to long term, the ETF development is great news for crypto as an asset class, as it really puts BTC on the map of millions of investors and potential 401(k)s," XBTO Senior Trader Douglas Comin said in an interview with The Block. "However, it'll take time for the inflows to build and the recent hype might have had short-term traders seeking a rapid gain."
According to CoinDesk, Bitcoin's trajectory in the coming months holds the key to the narrative surrounding spot ETFs. If prices languish, skeptics will have their "bust" chorus validated. However, a surge past $50,000, or even a challenge on its all-time high above $65,000, could crown the ETFs a resounding success.
Bitcoin's 2024 calendar currently holds a potential catalyst in the form of the upcoming halving event, where new BTC creation rates slow. Historically, this event has significantly boosted prices. In roughly 90-120 days, miner rewards will drop from 6.25 BTC to 3.125 BTC, potentially injecting fresh momentum into the cryptocurrency.
However, JAN3 CEO and Bitcoin bull Samson Mow predicts a potential supply in the coming days, which could drive prices to skyrocket to $1 million in a matter of "days or weeks." He hinges on the forecast of the recent launch of spot Bitcoin ETFs that squeeze supply and other market adjustments.
The launch of 11 spot Bitcoin ETFs has ignited massive trading volumes, significantly drying up the limited market supply. In addition, BlackRock aggressively purchased 11,500 BTC in just two days, equivalent to 13 times the current daily issuance of 900 BTC. This dynamic has experts buzzing about a potential demand surge, with exponential price climbs on the horizon if ETF inflows hold their momentum.
A CryptoSlate analysis warns that if institutional buying maintains its current pace, the available BTC supply could be gone within 120 days. This rapid depletion would propel Bitcoin to unprecedented scarcity, raising intriguing questions about future price trajectories.