US bitcoin ETFs begin trading testing investor appetite for crypto
channelnewsasia.comSeveral exchange-traded funds (ETFs) tied to the spot price of bitcoin began trading in the US on Thursday (Jan 11) in a landmark moment for the cryptocurrency industry that is set to test the broader acceptance of digital assets as an investment.Eleven spot bitcoin ETFs, including BlackRock's iShares Bitcoin Trust, Grayscale Bitcoin Trust, Valkyrie Bitcoin Fund and ARK 21Shares Bitcoin ETF, among others, began trading Thursday morning, kicking off a fierce competition for market share.The green light from the US Securities and Exchange Commission finally came late on Wednesday, following a decade-long tussle with the crypto industry."The approval has the potential to simplify and secure bitcoin investments for a broader investor base, which may reshape the dynamics of cryptocurrency investments," said Rajeev Bamra, senior vice-president of digital finance at Moody's Investors Service.The ETF launches lifted the price of bitcoin up to its highest level since Dec 2021.
It was last up 0.16 per cent at $46,021, while the price of ether, the second-largest cryptocurrency, was up 2.42 per cent.The regulatory nod is expected to start an intense competition for market share among the issuers, some of whom lowered the fees for their products well below the US ETF industry's standard even before Thursday's launch.Fees on the new bitcoin ETFs range from 0.2 per cent to 1.5 per cent, with many firms offering to waive fees entirely for a certain period of time.
For short-term speculators looking to buy in and out of the products, liquidity could be a more important factor.Grayscale - which was approved to convert its existing bitcoin trust into an ETF - on Thursday was touting its product as the world's largest bitcoin ETF, with more than $28 billion in assets under management.Analysts at Bernstein estimated that bitcoin ETF flows will build up gradually to cross $10 billion in 2024 in its race to $80 billion by the end of next year.
