Initial Thoughts Post-ETF

Jan 11, 2024 • 6 Min Read

Initial Thoughts on ETF Launches

The past week has marked a pivotal moment in the evolution of the crypto industry, a testament to the remarkable journey of an asset class that emerged from a distrubuted community of open source software developers just 15 years ago. This was evidenced by the successful launch of all 11 eligible Bitcoin ETFs on Thursday morning. Assessing the success of an ETF launch is a multifaceted process, involving a close examination of various key metrics such as trading volumes, the number of trades executed, and most crucially, AUM.

Given the t+1 settlement times, a full view of the first day's AUM might not be fully available until tomorrow. However, the initial trading volumes have been impressive, with the total volume across all products exceeding $4 billion, a commendable figure by any standard in the ETF realm.

A significant portion of this volume was notably from GBTC trades. This surge in volume is largely perceived as stemming from two main sources: investors in tax-advantaged accounts transitioning their holdings to lower-fee products, and entities unwinding their GBTC arbitrage positions (long GBTC, short spot). When the volumes from GBTC are set aside, the aggregate figure still stands impressively above $2 billion. Notably, the Bla...

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