Okay, the Bitcoin spot ETF is here. Now what?
As my colleague RT Watson noted, the launch of the new fund was met with much fanfare and liquidity, with volume reaching $3.1 billion on its second day of trading.
Among new spot Bitcoin fund issuers, BlackRock leads the way with $564 million in volume on Friday, followed by Fidelity with $431 million. This is according to data from Yahoo Finance compiled by The Block.
This initial liquidity is likely to be welcomed by issuers and market participants, further spurring the important milestone of the asset class maturing and gaining acceptance among Wall Street giants.
Proponents of this financial product expected it could replicate the impact of the first spot gold ETF on the precious metal. Bitcoin BTC
-3.24%
This moves to a wider investor base, causing prices to skyrocket.
However, it is important to recognize that these changes will unfold gradually. Although ETFs represent a pivotal stage, given the deliberately (some might say painfully slow) pace of Wall Street, it is best not to get too obsessed with flows and volume in these early stages.
The saying ‘if you build it, they will come’ is true, but it takes time.
Consider the fact that various market participants, most notably Vanguard, are currently prohibiting their customers from purchasing spot Bitcoin ETFs on their platforms. As the world’s largest retirement plan provider, Vanguard exemplifies the cautious approach adopted by industry majors. Meanwhile, CoinDesk reports that companies like UBS and Citi are planning to only allow Bitcoin ETF trading for “some” customers.
Even customers of JPMorgan Chase and Fidelity, including myself, encounter risk disclosure pop-ups when placing orders. Barriers still exist for financial advisors. I have received messages from numerous individuals that their advisors are either unwilling to provide exposure to Bitcoin ETFs or are completely opposed to adding such exposure. This isn’t all that surprising, considering that according to data collected by issuer Bitwise, such a product wasn’t even on their radar. In fact, less than half of advisors expected ETFs in 2024. Even when you’re ready to provide exposure, you’ll need to rework your portfolio mythology, secure executive buy-in, and more. Long process, not weeks.
Let us celebrate the recognition of its meaning. But realize that much of the hard work has only just begun.
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