Bitcoin’s Performance on Wall Street: What Can We Expect?

(CTN News) – This month, Bitcoin’s celebrated its 15th birthday on Wall Street. This adolescent asset may have to grow up fast.

Regulatory approval was granted to 11 US exchange traded funds (ETFs) tracking bitcoin’s spot price on Jan. 11, and after two trading days, they had 644,860 bitcoin worth $27 billion, according to analytics firm Glassnode.

More than 500,000 bitcoins were already held in a Grayscale Bitcoin Trust that was a closed-end fund before it was allowed to relaunch as an ETF.

CoinShares data shows $4.1 billion inflows into the 11 ETFs since Jan. 11.

Glassnode said bitcoin’s entry into the world’s largest stock market marks the end of bitcoin’s maturation and growth phase.

Many market players said that increasing liquidity would tame bitcoin’s volatility over time.

A newborn security with wildly uncertain value and price will evolve into a mainstream asset with a million punters, said Brent Donnelly, a currency trader and president of Spectra Markets.

Bitcoin’s trades for about $500 million a day on cryptocurrency exchanges, Donnelly said.

On their first day, spot bitcoin ETFs in the US traded $4.6 billion.

Even as things normalize, the NYSE dollar value traded of bitcoin will be higher than the blockchain value, Donnelly said.

However, market participants cautioned that it’s too soon to tell if bitcoin investment products will keep investors interested.

After two trading days, the 11 US ETFs held 644,860 bitcoins, or 30% of all global spot bitcoin ETFs.

The increased market liquidity could lead to derivative products that bet on bitcoin’s volatility, even if trading volumes drop as excitement fades.

Anders Helseth, head of research at K33 Research, said, “We expect the US trading session to be the most materially important session for bitcoin in the near future because of US ETF flows.”

The Bitcoin’s whales move

Since Satoshi Nakamoto mined the first block on Jan. 3 2009, bitcoin has seen its fair share of thrills and spills.

As part of its latest drama, it’s jumped 50% since mid-October on bets that ETF approval would attract fresh capital from retail and institutional investors alike.

Price pressure was caused by the sharp rally before the ETF decision.

The notoriously volatile cryptocurrency fell 16% to $40,267 after hitting a two-year high of $49,033. It’s still below 40% of its peak. Bitcoin’s whales, who own over 1,000 bitcoin each, are doing well.

As older coins are spent to take profits, the total supply of bitcoin held by long-term holders – those who’ve held for at least six months – has declined by about 75,000 from its all-time high in November. A long-term bitcoin holder sits on 55% unrealized profit, the data showed.

Aurelie Barthere, analyst at blockchain data firm Nansen, says it makes sense to monetize your portfolio if you have unrealized profits.

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