JAKARTA - The crypto market experienced a new breakthrough when an investment product called Exchange-Trad Funds (ETF) Bitcoin Spot set a new record, with trading volumes reaching $10 billion (around IDR 156 trillion) in the first three days after its launch.
This figure shows investor interest in Spot's Bitcoin ETF, which allows them to have direct exposure to Bitcoin without having to buy or store the crypto asset. Spot's Bitcoin ETF is also considered safer and more transparent, as its basic assets are stored by trusted custodians and supervised by regulators.
Among the 11 Bitcoin Spot ETFs launched in the US market, two stand out products are BlackRock's iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC) owned by Fidelity Investments. Both products managed to attract a net inflow of more than $900 million (approximately IDR 14 trillion) in the first three trading days, according to data from Yahoo Finance.
This success places BlackRock and Fidelity as strong competitors of the Grayscale Bitcoin Trust (GBTC), which has been the world's largest Bitcoin investment fund so far. GBTC, which is a transformation from a closed fund to an ETF Bitcoin Spot after obtaining approval from the US Securities and Exchange Commission (SEC) on January 11, 2024. In contrast, GBTC has experienced a flow of funds out of more than $579 million (approximately IDR 9 trillion) since starting trading.
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This shows that investors started switching from GBTC, which previously offered a premium price over Bitcoin, but then turned into a detrimental discount. With Spot ETF, investors can buy and sell stocks at a price closer to their basic asset value, namely Bitcoin.
According to the official iShares website, BlackRock's fund holds around 11,439 Bitcoins worth $500 million (around IDR 7.8 trillion) on Wednesday, January 17, 2024. Currently, Bitcoin is trading at $42,779 (around IDR 667 million), showing an increase in percentage of 0.03% in a day.
Historical Moments
According to Eric Balchunas, market analyst from Bloomberg, assessing that the launch of the Bitcoin Spot ETF is a historic milestone for the crypto industry, as it shows that US regulators are starting to open up to innovation in this sector. He also stressed the magnitude of the Bitcoin Spot ETF achievement, which recorded trading volumes more than three times the total combined trading volume of all 500 ETFs launched in 2023.
Furthermore, Balchunas estimates that Spot's Bitcoin ETF will continue to grow and attract more investors, both retail and institutional, who want to benefit from the trend of rising Bitcoin prices. He also said that Spot's Bitcoin ETF will have a positive impact on the crypto market as a whole, as it will increase liquidity, transparency and adoption of Bitcoin.
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