(CTN News) – Trading volumes for bitcoin surged after the first US exchange-traded funds with direct exposure to the world’s largest cryptocurrency debuted.
A day after the Securities and Exchange Commission approved nine new ETFs and two conversions from other products, they began trading on Thursday morning on the New York Stock Exchange, Nasdaq and Cboe exchanges in hopes of attracting investors.
Last year, Grayscale Investments, which owns the flagship bitcoin trust, won a legal battle against the SEC to convert it into an ETF.
Based on CoinGecko, bitcoin trading volumes have increased by about 40% in the past 24 hours.After a spike early in the day, bitcoin’s price pulled back to about $46,000, up less than 1 percent from yesterday.
In late 2021, ProShares launched an ETF based on bitcoin futures rather than the spot cryptocurrency, which raised $1bn in investor money within two days.It is expected that some of the newly approved spot bitcoin funds will grow rapidly based on this history.
“I think there will be some pretty strong inflows out of the gate,” said David Mann, head of ETF products at Franklin Templeton,
Which is launching a spot bitcoin ETF along with 11 other firms.
It will be interesting to see whether there is an initial pop followed by a slow climb.Due to the excitement and to what we believe will be a significant number of investors who want this particular exposure in an ETF form, we are proceeding as if assets will be quickly gathered.”
Bringing over about $29 billion in assets from its bitcoin trust gave Grayscale an immediate head start.On Thursday morning, Grayscale reported its highest trading volume ever for the newly converted product.
Michael Sonnenshein, Grayscale’s chief executive, told the Financial Times earlier this week that bitcoin must be acquired from the spot market and placed into ETFs to meet demand.
Approximately $113 million has been raised in seed capital for the new ETFs.VanEck’s fund started with $72.5 million, followed by $20 million from Fidelity and $10 million from BlackRock.
ETFs are issued by large and diversified asset managers such as BlackRock and Invesco, as well as smaller companies like Valkyrie and Bitwise that focus more on digital assets.
As a means of competing for flows, most issuers slashed prices in final pre-launch filings, and several waived investor fees after launch. In their first year, bitcoin ETFs should not generate $10 billion to $20 billion in flows, citing some “ridiculous numbers.”.