- US spot Bitcoin ETFs have bounced back at Tuesday’s market close with a total of $136 million in net inflows.
- BlackRock’s recent approval of its 19b-4 filing for options trading in its Bitcoin ETF is likely to enhance institutional appetite for this crypto-based exchange-traded product (ETP).
The US Securities and Exchange Commission (SEC) approved BlackRock’s 19b-4 filing for options trading within its Bitcoin exchange-traded fund (ETF) just last week. Bloomberg Senior ETF Analyst Eric Balchunas highlighted this as a significant advancement in the Bitcoin ETF arena.
Just days following this announcement, spot Bitcoin ETFs saw a surge exceeding $100 million in inflows.
A Major Victory for Bitcoin ETFs
Balchunas anticipated an influx of liquidity into the sector with the new product launch, which will subsequently “draw in larger players”, meaning institutional investors. He noted that while the timing was unexpected, it was crucial to remember that this approval is merely an initial step before the new financial instrument goes live in the US market.
The Bloomberg analyst explained that the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CTFC) also need to approve the Bitcoin ETF options before launching. Nonetheless, he assigned a 70% probability for full approval by the end of May next year.
Despite other exchanges withdrawing their applications for similar products, Balchunas and his fellow analyst James Seyffart foresee more entities eventually trying to incorporate BTC ETF options into their offerings.
In Contrast to Satoshi Nakamoto’s Vision
Themis Trading’s partner and co-founder Joe Saluzzi, however, argues that spot ETFs do not align with Satoshi Nakamoto’s original vision for Bitcoin. He shared with The Block that Bitcoin lacks regulation, making it vulnerable to price manipulation tactics such as wash trading. Furthermore, since it was designed within the framework of decentralized finance, it appears contradictory that it is now heavily influenced by traditional Wall Street entities.
Saluzzi criticized the SEC’s decision to approve Bitcoin futures ETFs, asserting that it set a precedent for the endorsement of spot ETFs, ultimately obliging them to sanction options trading on these same ETPs.
US Spot Bitcoin ETF Performance
Overall, US spot Bitcoin ETFs started with a modest $4.5 million flow on Monday, the day following the SEC’s announcement. However, by yesterday, those figures greatly improved, closing at $136 million.
Fresh off the approval of its 19b-4 for Bitcoin ETF options, BlackRock led with $11.5 million and $98.9 million in net inflows on Monday and Tuesday, respectively.
BlackRock continues to be the largest holder of shares in the spot Bitcoin ETF market, with assets under management in this category reaching $21.034 billion. This stands in stark contrast to Grayscale’s significant outflows, which have totaled $20.109 billion since transitioning to a spot BTC ETF in January.
Bitcoin Performance
On another note, Bitcoin has been trading between $62K and $64K over the past day. As of 5:00 AM UTC, its price holds in the $64,200 range, reflecting a gain of over 1% within a single day.
Additionally, trading volume surged by 6%, with $29.16 billion worth of BTC shifting between addresses. Meanwhile, the market cap for its circulating supply of 19.759 million now stands at $1.27 trillion.
Bitcoin’s recovery has reduced its loss from its peak price of $73,750.07 six months ago by approximately 13%.
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