The exciting period has started, after months of mixed reaction on ETF’s approval prospects, pump and dump sessions, and critical warnings it’s a real thing now. In the wake of the Securities and Exchange Commission’s (SEC) greenlight for spot Bitcoin ETFs, BlackRock’s iShares Bitcoin Trust ETF (IBIT) has made an impressive market debut. The ETF experienced a staggering 25% surge in pre-market hours on the Nasdaq, reaching $27.50 from a net asset value (NAV) of $26.12 on the approval date.
BlackRock’s IBIT ETF: A 25% Surge and $2 Billion Inflow
As market expectations point to a substantial inflow of around $4 billion into spot Bitcoin ETFs on the first day, BlackRock’s ETF is predicted to attract nearly $2 billion directly. To enhance its appeal, BlackRock responded to the approval by reducing fees to 0.25% and offering a partial fee waiver for the initial 12 months, resulting in a 0.12% fee structure for the first $5 billion of the Trust’s assets.
In pre-market trading, IBIT traded $2 million worth of shares, a substantial volume according to Bloomberg’s Eric Balchunas. While this volume is significant for a typical ETF’s first full day, Balchunas notes it may be influenced by BlackRock.
Live Trading and Operational Impact
The BlackRock spot Bitcoin ETF is live on various platforms, including the iShares website, Nasdaq, and 175,000 Aladdin investor platforms. This move is expected to simplify Bitcoin investments, eliminating operational obstacles and burdens, and allowing various investors, from asset managers to financial advisors, direct exposure to Bitcoin.
In addition to BlackRock, Grayscale’s Bitcoin Trust (GBTC) ETF commenced trading during the pre-market as well. Early in the trading day, GBTC stock rose 2%. The New York Stock Exchange lists GBTC.
Industry Leaders Optimistic
Executives from major fund issuers express optimism about the SEC’s approval of Bitcoin Spot ETFs. Dominik Rohe of BlackRock emphasizes IBIT as a cost-effective and convenient means for investors to access Bitcoin. Other industry leaders, including Matt Hougan (Bitwise), Michael Sonnenshein (Grayscale), Cynthia Lo Bessette (Fidelity), Roger Bayston (Franklin Templeton), and Leah Wald (Valkyrie), share positive sentiments about the potential of regulated investment vehicles and the efficient exposure to Bitcoin offered by these developments.
Broader Market Sentiments
Despite the recent acceptance of the first Bitcoin ETF, the price of the cryptocurrency stayed stable at around $46,000. Surprisingly, the fake news about ETF approval on January 9 had a bigger impact, briefly raising the price to $48,000. Although the response was not very strong, market experts are optimistic about possible bullish movements as official trading commences. They expect large amounts of capital to flow into these ETFs, which could significantly change the market landscape. At the moment, Bitcoin is selling above $46,500, which shows that investors are cautious but hopefully optimistic.
