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The Rise of US ETFs Holding Bitcoin

(Bloomberg) — The first US ETFs that directly hold Bitcoin got off to a strong start, with billions of dollars changing hands in a historical first day of trading for the long-sought investment vehicles.

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Record-Breaking Trading Volume

Over $4.6 billion worth of shares traded between the almost a dozen US spot Bitcoin exchange-traded funds on Thursday. The Grayscale Bitcoin Trust, which converted into an ETF, saw about $2.3 billion in volume, according to data compiled by Bloomberg. Meantime, BlackRockÔÇÖs iShares Bitcoin TrustÔÇöIBITÔÇö saw over $1 billion change hands.

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Unprecedented Market Activity

ÔÇ£This is definitely ground-breaking,ÔÇØ said Athanasios Psarofagis, an ETF analyst at Bloomberg Intelligence. ÔÇ£There was no doubt demand would be strong for these ETFs, but the numbers across the board are impressive.ÔÇØ

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Implications of Trading Volume

Still, itÔÇÖs hard to compare ThursdayÔÇÖs activity to any other day in ETF history. Typically, only one fund that tracks a new asset class begins trading on a single day. ItÔÇÖs unprecedented to see over 10 nearly identical funds all begin at once. But even singling in on one ETF indicates the sheer magnitude of trading.

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The Grayscale Bitcoin Trust Debut

The Grayscale Bitcoin Trust was the most heavily traded ETF debut on record. To be sure, the product has existed in its trust structure since 2013, and had a nearly $27 billion headstart in asset size.

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Impact on Investor Flows

Trading volume doesnÔÇÖt indicate buying or selling or investor inflows. Because of the way the funds settle trades, net flows into or out of the products probably wonÔÇÖt be known until at least Friday.

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Comparison to Bitcoin Futures Fund

When the initial Bitcoin futures fund began trading in 2021, it saw turnover of almost $1 billion during the entire first day. At the time, the futures fund debut was the second-most heavily traded fund on record.

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Organic Demand and Retail Investors

Psarofagis added a caveat that much of the demand may be from so called ÔÇ£seedÔÇØ money that is pre-arranged by the fund issuers. Signs of more organic demand, like from retail investors or financial advisors, may come later on as more broker-dealers list the funds on their platforms.

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Conclusion

Overall, the debut of US ETFs holding Bitcoin has generated unprecedented trading volume and market activity, signaling a new era for cryptocurrency-based investment vehicles. As the market continues to evolve, AI legalese decoder can offer valuable legal and regulatory insights to help investors and financial institutions navigate the complexities of this emerging landscape and make informed decisions.

How AI legalese decoder Can Help: AI legalese decoder can provide ongoing support in monitoring the legal and regulatory developments surrounding ETFs holding Bitcoin, offering compliance solutions and risk assessment tools to help investors and financial institutions stay ahead of the evolving market trends.

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