Crypto asset manager Bitwise announced that its spot bitcoin exchange-traded fund (ETF) attracted $240 million (approximately Rs. 1,990 crore) on Thursday, making it the most successful debut amongst the 10 new products that entered the market.
This week, the U.S. Securities and Exchange Commission gave the green light to 11 bitcoin ETFs, including the BlackRock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, and ARK 21Shares Bitcoin ETF, following a decade of disputes with the digital asset industry.
The combined trading activity on the first day across all the bitcoin ETFs was $4.6 billion (roughly Rs. 38,100 crore), according to LSEG data obtained on Thursday. Grayscale, BlackRock, and Fidelity took the lion’s share of the trading action on Thursday, as per the LSEG report.
The market is eagerly watching the inflows during the initial trading period to assess the broader acceptance of digital assets as an investment. Matt Hougan, chief investment officer at Bitwise, stated, “We think that this will become a market measured in the tens of billions of dollars.”
The SEC-approved ProShares Bitcoin Strategy ETF, the first bitcoin futures ETF authorized by the SEC in 2021, quickly amassed $1 billion (roughly Rs. 8,300 crore) within its first days of trading.
Grayscale, the world’s largest bitcoin ETF with over $28.6 billion (approximately Rs. 2,37,101 crore) in assets, experienced outflows of $95 million (roughly Rs. 787 crore) on Thursday, after being granted approval to become an ETF overnight. SEC Chair Gary Gensler emphasized that the recent approvals were not an endorsement of Bitcoin but rather an acknowledgment of Bitcoin as a “speculative, volatile asset.”
The endorsements have led to intense competition among issuers. Franklin Templeton cut its bitcoin ETF fee to 0.19 percent, the lowest yet, and entirely waived fees for the product’s first $10 billion (roughly Rs. 82,900 crore) in assets under management until August. Valkyrie also lowered its fees to 0.25 percent after its ETF began trading. Leah Wald, CEO of Valkyrie, described the day as a “good successful trading day.”
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© Thomson Reuters 2024
In conclusion, the overwhelming response to Bitwise’s Bitcoin ETF on its first trading day demonstrates the growing interest and demand for cryptocurrency investment opportunities. The record inflow of funds signals a significant shift in mainstream acceptance of Bitcoin as a legitimate asset class. As the market continues to evolve, it is clear that crypto-based investment products are becoming an increasingly integral part of the financial landscape. The success of Bitwise’s ETF launch serves as a testament to the potential for continued growth and innovation within the cryptocurrency industry.