Newly launched bitcoin exchange-traded funds are showing early signs of success, but have yet to reach the level of massive cryptocurrency boost that some bulls expected. The funds began trading on January 11 after receiving approval from the US Securities and Exchange Commission, and the iShares (IBIT) and Fidelity Wise Origin (FBTC) ETFs have already raised more than $1 billion in cash from investors in less than 10 trading days. . Despite these rapid achievements, reviews of the launches have been somewhat lukewarm. Inflows “disappointed the most optimistic forecasts,” Citi analyst Alex Saunders said in a January 19 note to clients. In his own note dated January 19, Barclays analyst Benjamin Bowdish considered first-week flows “marginally positive.” The launches also proved to be a “news sell” event for bitcoin itself, which surged late last year in anticipation of approval. Bitcoin’s price was trading below $41,000 on Monday, down from more than $49,000 at one point on the ETF’s launch day. BTC.CM= Bitcoin Mountain has fallen since the beginning of the year since the launch of Bitcoin ETFs. This fall comes after some cryptocurrency investors cited the launch of ETFs as a catalyst that could push Bitcoin to $100,000 in 2024. The idea behind these predictions was that the ease of purchasing ETFs would attract new investors who were previously fearful of cryptocurrencies. . Aniket Ullal, head of ETF data and analytics at CFRA Research, described the launches as a “strong, but not spectacular, start” and said it was difficult to get a good estimate of how the funds would perform before launch. “No one was quite sure about the demand out of the gate. Because obviously we know there was a lot of excitement around the launch, but how much of that would translate? And so I think there wasn’t a good consensus on what the outcome looks good,” Ullal said. The flow data would look much stronger if Grayscale Bitcoin Trust (GBTC) was excluded. The fund had more than $28 billion worth of bitcoin when it converted from an over-the-counter trust to an ETF, but it saw more than $2 billion in outflows. Since then, some outflows from GBTC have been expected, due to its high cost compared to other funds and the fact that it regularly trades at a significant discount to its net asset value as an over-the-counter product. This discount likely attracted arbitrage players who used the launch of the European training as an opportunity to close their trades. “It is not contrary to expectations,” Ullal said. “Given that their fees are much higher than others, I don’t think it’s that bad.” All the other new funds are seeing inflows, even if some are lagging far behind the likes of IBIT and FBTC. While the funds’ first week may not have met some huge expectations, But the early inflows were very large by ETF standards.For comparison, only two ETFs launched in 2023 ended the year with more than $1 billion in net inflows, according to FactSet, and both were launched in the first half of the year. “Only eight new funds ended the year with net inflows of more than $500 million. Trading volume was also strong, suggesting that the funds should have staying power.” $12 billion of cumulative trading volume in 4 trading days is considered a “successful launch.” . Yesterday, all Bitcoin ETFs combined traded $2.2 billion, and IBIT traded $340 million. By comparison, the SPDR Gold ETF (GLD) trades about $1.2 billion a day,” Bernstein analyst Gautam Chugani said in a January 18 note to clients. Another thing to keep in mind when evaluating new ETFs is that the launch does not mean all advisors will Financials are able to purchase funds on day one. Some brokerage platforms have rules around metrics such as track record and trading volume that must be met before new funds are added. “If bitcoin prices remain fairly stable, I feel there may be demand for The longer term is here as asset managers get into brokerage firms and advisors get more comfortable with them.”