US Spot Bitcoin ETFs Mark One Year Anniversary, But the Party's on Hold

The United States Spot Bitcoin exchange-traded funds (ETFs) are celebrating their first anniversary, and while they have certainly brought excitement to the crypto market, the price of most cryptos is down and the ETFs have not fared much better.

Nearly a year after their first trading on January 11, 2024, the ETFs have suffered some of their heaviest outflows. The most recently available data from Wednesday shows over half a billion USD left the funds combined.

The 24-hour trading volume was also nothing to scoff at with a surge of US$3.5 billion (AU$5.65 billion).

BlackRock’s IBIT, setting the standard as usual, led the charge with a US$2.53 billion (AU$4.08 billion) trading volume followed by Fidelity’s FBTC US$406.84 million (AU$657 million).

Of course, volume is the combination of inflows and outflows, so all the trades, including buyers stepping in to load up on an ETF and sellers handing over their ownership to a Bitcoin ETF.

Looking at actual outflows, which were negative across the board for these ETFs, FBTC saw the largest net outflow with US$258.7 million (AU$414.8 million), followed by IBIT’s US$124 million (AU$200 million).

So, the discrepancy in volume and outflows comes likely from the fact that FBTC experienced more capital withdrawal relative to its trading volume, whereas more capital overall remained invested than was withdrawn for IBIT, which already has the largest amount of BTC under management.

Back to the anniversary, and some historical context. The very first trading day had much more balanced flows.

Bitwise Bitcoin ETF (BITB) led with the largest net inflows, followed by FBTC and IBIT. In total, the first ever day of trading for these funds saw US$655.3 million (AU$1.06 billion) in net inflows.

And Bitcoin itself? On that day, the asset behind all the ETFs traded in a range of US$46-47k (approx. AUD $70k at the time). Today one coin trades hands for US$92,690 (AU$149,497).

It is hard to believe it’s been a year already. Time truly does fly, let’s see where we’re at in another 12 months’ time.

Maybe we have several new altcoin ETFs? Will Bitcoin be US$250k as some have speculated?

I guess only time will tell (and that’s enough with the idioms for today).