January 2024: The Debut of Spot Bitcoin ETFs
Research Team
Last Updated: 2/1/2024 | 10 min. read
Spot Bitcoin ETFs debuted in the US market, and highlights include high trading volumes and net inflows totalling about $1.5bn.
Valuations for Bitcoin and Ethereum were little changed during the month, while prices for many “alt coins” declined. Positioning measures suggest active traders reduced risk after US spot Bitcoin ETFs began trading.
Meanwhile, stablecoin market capitalization continued to rise, markets focused on crypto & AI synergies, and the Federal Reserve signaled it was not ready to begin cutting rates.
More than ten years after the first application, spot Bitcoin exchange traded funds (ETFs) debuted in the US in January 2024. There have been many milestones on Bitcoin’s journey to the center of the global financial system, including the first exchanges, the first derivative products, and the first loans against Bitcoin as collateral. Although these events can be lost in the day-to-day focus on prices and flows, we see the launch of the new Bitcoin ETFs as another major step in the development of the nascent crypto asset class.
Exhibit 1: Spot Bitcoin ETF volumes ranked among large equity and bond products
Net inflows into the new products soared at the start of trading and stabilized as the month progressed. Since January 11, net inflows into the US-listed spot Bitcoin ETFs have totalled about $1,460mn (Exhibit 2). This was partly offset by net outflows from crypto exchange traded products (ETPs) overseas (especially Bitcoin funds in Canada), such that net inflows into all products totalled about $1,094mn since January 11 (and $1,285mn for January as a whole).
Exhibit 2: Net inflows into US-listed spot Bitcoin ETFs, outflows elsewhere
[1] Source: Bloomberg, as of January 31, 2024.
[2] Source: Bloomberg. Returns measured from December 29, 2023 through January 31, 2024.
[3] Source: Glassnode data, as of January 31, 2024..
[4] Source: CoinGecko, as of January 31, 2024.
[6] Source: CoinGecko, as of January 31, 2024.
[8] Source: CoinGecko, as of January 31, 2024.
[9] Source: DeFi Llama, Grayscale Investments. As of January 31, 2024.
Important Information
Investments in digital assets are speculative investments that involve high degrees of risk, including a partial or total loss of invested funds. Investments in digital assets are not suitable for any investor that cannot afford loss of the entire investment.
All content is original and has been researched and produced by Grayscale Investments, LLC (“Grayscale”) unless otherwise stated herein. No part of this content may be reproduced in any form, or referred to in any other publication, without the express consent of Grayscale.
This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any investment in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change. This content does not constitute an offer to sell or the solicitation of an offer to sell or buy any security in any jurisdiction where such an offer or solicitation would be illegal. There is not enough information contained in this content to make an investment decision and any information contained herein should not be used as a basis for this purpose.
This content does not constitute a recommendation or take into account the particular investment objectives, financial situations, or needs of investors.
Investors are not to construe this content as legal, tax or investment advice, and should consult their own advisors concerning an investment in digital assets. The price and value of assets referred to in this content and the income from them may fluctuate. Past performance is not indicative of the future performance of any assets referred to herein. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments.
Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on Grayscale’s views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements. In addition to statements that are forward-looking by reason of context, the words “may, will, should, could, can, expects, plans, intends, anticipates, believes, estimates, predicts, potential, projected, or continue” and similar expressions identify forward-looking statements. Grayscale assumes no obligation to update any forward-looking statements contained herein and you should not place undue reliance on such statements, which speak only as of the date hereof. Although Grayscale has taken reasonable care to ensure that the information contained herein is accurate, no representation or warranty (including liability towards third parties), expressed or implied, is made by Grayscale as to its accuracy, reliability, or completeness. You should not make any investment decisions based on these estimates and forward-looking statements.
There is no guarantee that the market conditions during the past period will be present in the future. Rather, it is most likely that the future market conditions will differ significantly from those of this past period, which could have a materially adverse impact on future returns. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. We selected the timeframe for our analysis because we believe it broadly constitutes the most complete historical dataset for the digital assets that we have chosen to analyze.
Share This
Like what you see?
Subscribe below for the latest research from Grayscale.
