Finally, complete figures are available from the trading of listed Bitcoin products in the United States during Wednesday. These show that the gross inflow of capital from the new ETF funds amounted to a whopping $914 million. Even after Grayscale customers continued to abandon Grayscale by selling fund shares for $450 million, net capital flow on Wednesday totaled US$463 million. This means that the net inflow of capital to buy Bitcoin amounts to US$1.3 billion over the course of four trading days.
The updated figures are based, inter alia, on gross and net figures shared on X/Twitter by Eric Balchunas, a leading ETF analyst from Bloomberg, who has kept the market updated ever since before the ETFs were approved. The figures have also been confirmed by the Danish crypto analyst Mads Eberhardt at Steno Research.
This article involves an update of the contents of an article that Kaupr published on Thursday morning, under the title “Bitcoin ETF turnover passes $11 billion. USD but both the crypto community and TradFi are confused”. We then reported that since the ETFs were approved, confusion has prevailed both with crypto investors and traditional Fiat investors. What everyone has been asking is: How big is the net demand and purchase of Bitcoin really, given that Greyscale customers continue to sell down. It is becoming increasingly clear that Bitcoin ETFs have met with interest that the ETF market has not seen before. During the first four trading days, gross trade volume amounted to USD 11 billion, or NOK 115 billion.
Investors are still trying to understand how the capital flows between the ETFs and the Bitcoin market are related. These are questions that we have also thoroughly reviewed in the latest edition of the Unleash Insight newsletter. This newsletter contains both news, analysis and commentary on the ETF approval, including an ETF Q&A.
There are several explanations that investors, regardless of which camp one belongs to, have had difficulties in getting an overview. The first is that while the crypto exchanges are continuously open both around the clock and on holidays, the traditional exchanges are up from 09:30 - 16:00 - then only on weekdays
The second explanation for the confusion is that although the capital of ETF funds should be invested 100% directly in Bitcoin, this does not happen immediately, but is usually spread over 1-2 trading days after the funds have received their deposits.
The third problem is the delay inherent in both settlement and reporting, so that the numbers shared, or as is speculated, on X/Twitter, are almost never in sync. Full figures from Wednesday were thus not available until Thursday afternoon (Norwegian time).
The fourth challenge is that many Grayscale investors who have now finally converted their fund shares into shares in an ETF are choosing to sell out of Grayscale. In addition to posing a selling pressure on the Bitcoin exchange rate, this also makes it even harder to get a real, net and real-time view of what the ETFs have contributed in terms of new demand for Bitcoins. While the sell-off from Grayscale amounted to $594 million on Tuesday, yesterday's figure was $450 million. It is probably too early to believe that the Grayscale sales push is over.
Another challenge is that part of the capital going into the new US ETFs appears to be coming from other Bitcoin-related funds. It has been reported that some have exchanged their investments in European ETPs with US ETFs. Also, interest in ETFs, based on Bitcoin futures, which were approved a couple of years ago, has dropped significantly now that one can buy an ETF anchored in Bitcoin spot.
No matter how you interpret the numbers, there is no doubt that interest after investing in Bitcoin in a regulated way is record-breaking. The trading volume of the new Bitcon ETFs to date, well 11 billion USD after four days, already exceeds what 500 newly listed ETFs managed to generate in revenue throughout 2023.
European CoinShares, which is in the process of establishing a record of the total turnover of Bitcoin-based ETFs, regardless of geography and category, reported on Monday January 15th that the previous week's global trading volume amounted to $17.5 billion. According to CoinShares, this was the largest figure ever recorded, while the weekly average in 2022, for example, stood at $2 billion.
What, then, is the net inflow of new capital for the purchase of Bitcoin? Due to the challenges described earlier in this article, various estimates have been shared. CoinShares estimated that the first week the ETFs could be bought and sold in the United States added $1.18 billion in net fresh capital. This week, gross trading volume in the US has declined slightly, on top of which Grayscale clients have continued their sale of fund shares. On Tuesday, the inflow of new capital was about the same level as the Grayscale sell-off, while Wednesday's trading ended with a net inflow of new capital.
However, there is no doubt that the confusion and uncertainty about the real impact of the ETF approval has, in the short term, helped push the Bitcoin price up. What will happen if the fog now eases, and the speech of the numbers becomes clearer? That's the first question the Twitterate has asked itself. While the second, important question, often asked with hope in the voice, has been: When will we be able to establish that the Grayscale sales pressure is over?
Finally, complete figures are available from the trading of listed Bitcoin products in the United States during Wednesday. These show that the gross inflow of capital from the new ETF funds amounted to a whopping $914 million. Even after Grayscale customers continued to abandon Grayscale by selling fund shares for $450 million, net capital flow on Wednesday totaled US$463 million. This means that the net inflow of capital to buy Bitcoin amounts to US$1.3 billion over the course of four trading days.
The updated figures are based, inter alia, on gross and net figures shared on X/Twitter by Eric Balchunas, a leading ETF analyst from Bloomberg, who has kept the market updated ever since before the ETFs were approved. The figures have also been confirmed by the Danish crypto analyst Mads Eberhardt at Steno Research.
This article involves an update of the contents of an article that Kaupr published on Thursday morning, under the title “Bitcoin ETF turnover passes $11 billion. USD but both the crypto community and TradFi are confused”. We then reported that since the ETFs were approved, confusion has prevailed both with crypto investors and traditional Fiat investors. What everyone has been asking is: How big is the net demand and purchase of Bitcoin really, given that Greyscale customers continue to sell down. It is becoming increasingly clear that Bitcoin ETFs have met with interest that the ETF market has not seen before. During the first four trading days, gross trade volume amounted to USD 11 billion, or NOK 115 billion.
Investors are still trying to understand how the capital flows between the ETFs and the Bitcoin market are related. These are questions that we have also thoroughly reviewed in the latest edition of the Unleash Insight newsletter. This newsletter contains both news, analysis and commentary on the ETF approval, including an ETF Q&A.
There are several explanations that investors, regardless of which camp one belongs to, have had difficulties in getting an overview. The first is that while the crypto exchanges are continuously open both around the clock and on holidays, the traditional exchanges are up from 09:30 - 16:00 - then only on weekdays
The second explanation for the confusion is that although the capital of ETF funds should be invested 100% directly in Bitcoin, this does not happen immediately, but is usually spread over 1-2 trading days after the funds have received their deposits.
The third problem is the delay inherent in both settlement and reporting, so that the numbers shared, or as is speculated, on X/Twitter, are almost never in sync. Full figures from Wednesday were thus not available until Thursday afternoon (Norwegian time).
The fourth challenge is that many Grayscale investors who have now finally converted their fund shares into shares in an ETF are choosing to sell out of Grayscale. In addition to posing a selling pressure on the Bitcoin exchange rate, this also makes it even harder to get a real, net and real-time view of what the ETFs have contributed in terms of new demand for Bitcoins. While the sell-off from Grayscale amounted to $594 million on Tuesday, yesterday's figure was $450 million. It is probably too early to believe that the Grayscale sales push is over.
Another challenge is that part of the capital going into the new US ETFs appears to be coming from other Bitcoin-related funds. It has been reported that some have exchanged their investments in European ETPs with US ETFs. Also, interest in ETFs, based on Bitcoin futures, which were approved a couple of years ago, has dropped significantly now that one can buy an ETF anchored in Bitcoin spot.
No matter how you interpret the numbers, there is no doubt that interest after investing in Bitcoin in a regulated way is record-breaking. The trading volume of the new Bitcon ETFs to date, well 11 billion USD after four days, already exceeds what 500 newly listed ETFs managed to generate in revenue throughout 2023.
European CoinShares, which is in the process of establishing a record of the total turnover of Bitcoin-based ETFs, regardless of geography and category, reported on Monday January 15th that the previous week's global trading volume amounted to $17.5 billion. According to CoinShares, this was the largest figure ever recorded, while the weekly average in 2022, for example, stood at $2 billion.
What, then, is the net inflow of new capital for the purchase of Bitcoin? Due to the challenges described earlier in this article, various estimates have been shared. CoinShares estimated that the first week the ETFs could be bought and sold in the United States added $1.18 billion in net fresh capital. This week, gross trading volume in the US has declined slightly, on top of which Grayscale clients have continued their sale of fund shares. On Tuesday, the inflow of new capital was about the same level as the Grayscale sell-off, while Wednesday's trading ended with a net inflow of new capital.
However, there is no doubt that the confusion and uncertainty about the real impact of the ETF approval has, in the short term, helped push the Bitcoin price up. What will happen if the fog now eases, and the speech of the numbers becomes clearer? That's the first question the Twitterate has asked itself. While the second, important question, often asked with hope in the voice, has been: When will we be able to establish that the Grayscale sales pressure is over?
