The U.S.-listed Spot Bitcoin ETFs experienced a trading volume of $4.6 billion in shares a day later following the SEC’s approval on Wednesday.
Spot Bitcoin ETFs Experience a Surge in Trading Volumes
After a decade-long struggle with the crypto industry, the U.S. Securities and Exchange Commission (SEC) finally approved certain products on Wednesday. Eleven spot Bitcoin ETFs, which include BlackRock’s iShares Bitcoin Trust (IBIT.O), Grayscale Bitcoin Trust (GBTC.P), and ARK 21Shares Bitcoin ETF (ARKB.Z), among others, commenced trading on Thursday morning, initiating a competitive battle for market share. Grayscale, BlackRock, and Fidelity emerged as dominant players in trading volumes.
Despite the approval, numerous executives cautioned against considering Bitcoin as a high-risk investment. Vanguard, a prominent mutual funds provider, also declared its lack of intention to offer the newly approved spot bitcoin ETFs on its platform for brokerage clients.
Previously, the SEC had consistently denied approval for all spot bitcoin ETFs, citing concerns related to investor protection. However, in a statement made by SEC Chair Gary Gensler on Wednesday, he clarified that the recent approvals should not be interpreted as an endorsement of Bitcoin. Gensler emphasized that bitcoin remains a “speculative, volatile asset.”
Divergent Predictions on Spot Bitcoin ETF Flows Elicit Market Speculation
With the initiation of ETF trading on Thursday, market participants closely scrutinized bid-ask spreads. These spreads, representing the discrepancy between buying and selling prices, are pivotal in gauging ETF desirability. Narrower spreads generally signal greater favorability.
Various factors, including trading volume, internal infrastructure, and the number of market participants, play a crucial role in determining bid-ask spreads.
Jason Stoneberg, Director of Product Strategy at Invesco, underscores the significance of these elements, particularly with the debut of Invesco’s ETF in collaboration with Galaxy Digital on Thursday. The introduction of the ETFs propelled the price of Bitcoin to $49,103. Simultaneously, the price of Ether, the second-largest cryptocurrency, has risen by 2.79% to reach $2,597.95.
