12th January 2024 > > spot BTC ETFs.

tl;dr

The debut trading day for spot BTC ETFs throws up some interesting numbers, as well as some villains of the investment management industry.

Market Snap

Market Wrap

There are some who believe that the price action of BTC has been disappointing. It certainly wasn’t a sell the news event which is cheering. With a rotation out of GBTC and a seeming lack of interest from institutional investors (see below), will the buying that the clients of BlackRock, Fidelity, et al, said they had appetite for, materialise in the coming months or not?

Curious Cryptos’ Commentary – Volume

The trades in GBTC were likely to be mostly on the selling side as the 50% discount to NAV that has been narrowing for a year finally went to zero yesterday. Investors in GBTC from the backend of 2022 have enjoyed a trebling of the BTC price, turbo-charged by the removal of the discount giving a six-times return. It is only sensible to take those gains off the table.

The other ETF trades were almost entirely on the buying side (there is no mechanism to go short), giving us roughly $2bn of sales and $2bn of buys, so it seems there was no net new demand on the first day of trading.

The GBTC sellers taking advantage of the discount removal are probably mostly done. It is safe to assume that new trades from today in the other ETFs will continue to be concentrated on the buying side, at least for now.

With 458,000 trades across $2.233bn of notional we have an average trade size of $4,900 which – though large for some retail investors – is miniscule for institutional investors. The institutions will come, but not yet it seems.

Curious Cryptos’ Commentary – Vanguard

There are some investors who cannot invest in spot BTC ETFs. Vanguard (cue pantomime boos) has taken the decision to prevent its clients from buying spot BTC ETFs:

According to CoinDesk a spokesperson for Vanguard said that “crypto-related products don't align with the asset manager's focus on asset classes that build blocks of a well-balanced, long-term investment portfolio."

And there’s me thinking that mature, responsible adults are allowed to make their own decisions as to which investments are suitable or otherwise for their own personal financial objectives. If I had any investments with Vanguard, I would be moving them away in protest at its implicit assumption that I am a child and cannot be trusted to make my own decisions.

Curious Cryptos’ Commentary – UBS

UBS is restricting some (most?) of its retail client base from buying spot BTC ETFs.

And there’s me thinking that mature, responsible adults … you know how this goes.

Curious Cryptos’ Commentary – Robinhood

Robinhood, the investment app whose primary client base are those who have only recently moved from childhood into adulthood, has announced that all spot BTC EFTs are available to trade.