Bitcoin rally propels spot ETFs, as BTC surges close to $49K on day one

Written by Rock Buivy

Post Date: 25 Jan, 24

In the midst of the ongoing Bitcoin rally, markets have shown a favorable response to the inaugural day of trading for spot BTC ETFs.

Markets respond favourably to the first day of trading for spot BTC ETFs, as ETH reaches a 12-month high and Bitcoin soars to almost $49,000.

The first-ever spot Bitcoin exchange-traded fund (ETF) was eventually approved by the US Securities and Exchange Commission on January 10, after traders had been waiting impatiently for almost a decade. Less than a day later, trading in the ETF started at the opening bell.

Trading has started for a number of BlackRock products, including the ARK 21Shares Bitcoin ETF, Bitwise (BITB), Valkyrie Bitcoin Fund (BRRR), Grayscale Bitcoin Trust (GBTC), and iShares Bitcoin Trust (IBIT).

There was a lot of trading activity in the early hours of the day. Eric Balchunas, an analyst with the Bloomberg Bitcoin ETF, noted something similar, saying:

"Wow, only 20 min into trading and the volume is big with HALF A BILLION traded for the group (ex GBTC too) (outpacing $BITO by a lot) led by $IBIT (which is near lock to pass $1b) and $FBTC. Imp to note almost all the volume in the first few days will convert to inflows."

The iShares Bitcoin Trust increased by more than 4% in early trade, while the Grayscale Bitcoin Trust increased by about 6%.

The positive market response underscores the evolving nature of cryptocurrency investments and the increasing interest from institutional and retail investors alike.

Against the backdrop of the Bitcoin rally, the inaugural trading day for spot BTC ETFs serves as a landmark event, further shaping the narrative of cryptocurrencies as a legitimate and influential asset class.

With “40% of the total volume,” or more than $1 billion, traded in the first two hours of trading, GBTC was the largest of the group at the time of writing.

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An over-the-counter trust with assets of more than $28 billion was transformed into the Grayscale fund.

A different approach from an existing Bitcoin futures ETF is the Hashdex fund. SEC records indicate that as of the time of writing, the modification had not yet gone into effect.

Eleven spot Bitcoin ETFs were approved by the regulator, opening the door for investors to participate in the largest cryptocurrency in the world based on market capitalization without taking on the risk of holding the digital token directly.

TradingView, a charting tool, has expanded its functionality to include support for spot Bitcoin ETFs utilising the issuers’ price tickers. This enables traders to conveniently monitor and evaluate the performance of these funds.

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Options Pricing Amidst Bitcoin Rally: Navigating the Dynamics of a Cryptocurrency Surge

Amidst the ongoing Bitcoin rally, a pivotal focus emerges on understanding the intricacies of options pricing.

Following the SEC’s approval of spot ETFs, Bitcoin’s implied volatility has experienced a significant decline.

This shift in volatility serves as a noteworthy lesson for traders navigating the dynamic cryptocurrency market.

As attention pivots towards the potential approval of ether ETFs, traders are now closely monitoring the evolving landscape.

The anticipation of an ether ETF launch later this year has prompted market participants to seek insights into how the options market is valuing potential price movements.

In this climate of changing dynamics, traders are increasingly recognizing the importance of understanding how options on ether are priced.

The pricing of options can offer valuable insights into market sentiment and expectations surrounding the future performance of ether.

As the cryptocurrency market continues to mature, the interplay between regulatory developments and market dynamics becomes a focal point for traders seeking to make informed decisions.

The evolving narrative around ETFs, coupled with the nuanced nature of cryptocurrency markets, underscores the need for traders to adapt their strategies.

With the spotlight now on ether and its potential ETF launch, the coming months are poised to bring further insights into how the market responds to these developments, shaping the future landscape of digital asset trading.

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