2024-01-23 19:55:36
© Reuters. Illustration shows cryptocurrencies 08/10/2022 REUTERS/Dado Ruvic/Illustration
Por Lisa Pauline Mattackal e Medha Singh
(Reuters) – Bitcoin celebrated its 15th anniversary this month, entering Wall Street with an effervescent bang. Now the young asset may have to grow up quickly.
Investors have embraced 11 U.S. exchange-traded funds (ETFs) tracking the spot price of , which began trading on Jan. 11 after receiving regulatory approval.
After two days of trading, they held a total of 644,860 bitcoins worth more than $27 billion, according to data from analytics firm Glassnode.
Much of that value — more than 500,000 bitcoins — was already in the Grayscale Bitcoin Trust, which was previously a closed-end fund before being allowed to be relaunched as one of the new ETFs.
The 11 ETFs have seen total inflows of 4.1 billion since Jan. 11, according to data from CoinShares.
The entry of the world’s largest cryptocurrency into the largest stock market on the planet “marks the end of the beginning of bitcoin’s maturation and growth phase,” Glassnode said.
This echoed the view of many market participants, who said that increased liquidity would tame bitcoin’s volatility over time.
The total value of bitcoin traded on cryptocurrency exchanges is about $500 million a day on average, said Donnelly, an exchange trader and president of Spectra Markets. By comparison, US spot bitcoin ETFs recorded $4.6 billion in volume on their first day of trading.
“I would assume that even when things normalize, the value of bitcoin traded in dollars on the NYSE will be higher than what passes through the blockchain,” Donnelly said.
However, it is still too early to assess whether new bitcoin investment products will be able to maintain investor interest in the long term, market participants warn.
Even if trading volumes fall as the excitement subsides, increased market liquidity could lead to the launch of derivatives products that bet on bitcoin’s volatility, according to some market watchers.
The strong rise in the months leading up to the decision on ETFs encouraged investors to cash in, putting pressure on prices. After hitting a two-year high of $49,033 following the ETF’s approval, the notoriously volatile cryptocurrency fell 16% to $40,267. It remains about 40% below its all-time peak of $69,000.
((Brasília Editorial Translation)) REUTERS VB FDC
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