Bitcoin ETFs (Exchange Traded Funds) are exchange-traded funds that invest in the cryptocurrency, allowing investors to gain exposure to its price without having to purchase it directly. They work similarly to ETFs for traditional assets, such as stocks or bonds, and are traded on regulated stock exchanges.
The companies that have been granted permission since January 12, 2024 by the United States Securities Commission (SEC) are: Blackrock (IBIT), The Grayscale Bitcoin Trust (GBTC), Fidelity (FBTC), Ark Invest /21Shares (ARKB), Bitwise (BITB), Franklin (EZBC), Investco / Galaxy (BTCO), Vaneck (HODL), Valkyrie (BRR) and Wisdomtree (BTCW).
It should also be noted that Grayscale Investments, while not an ETF, offers the Grayscale Bitcoin Trust (GBTC), an investment product that tracks the price of Bitcoin.
Bitcoin ETFs have had an impact on the cryptocurrency market for a variety of reasons:
Greater accessibility: They have made it easier for traditional investors to invest in Bitcoin, which has expanded the investor base and increased market liquidity.
Legitimation: The approval of ETFs by the SEC has been seen as an important step towards legitimizing Bitcoin as a financial asset.
Volatility: They have contributed to Bitcoin price volatility, as purchases and sales of ETFs can have a significant impact on demand.
The chart on Bitcoin Charts BGeometrics shows the daily evolution of BTC purchases and sales of these companies and there we can see how GBTC has been selling bitcoin and the rest of the companies have been buying.
The black line indicates the percentage of BTC that is held by the companies offering the ETFs.
This other graph shows the daily flow of purchases and sales of BTC by these companies.
The black line indicates the price of BTC and the blue line indicates the total amount of bitcoin held by these companies.
To date there is a high correlation between ETF purchases and sales and the price of BTC. The large initial purchases made by new investors who have been exposed to bitcoin in this “indirect” way have driven up the price of BTC.
These new actors with their peculiarities and their ways of valuing the price are going to add new factors that will have to be taken into account when quantifying possible increases or decreases in the price of bitcoin.
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