NEW YORK, January 11, 2024 - On their debut trading day, Bitcoin exchange-traded funds (ETFs) exhibited significant volatility, reflecting the broader fluctuations in cryptocurrency prices. The Grayscale Bitcoin Trust (GBTC) closed with a modest gain of 0.5%, well below its peak for the day, while the iShares Bitcoin Trust (IBIT) fell over 4% after an initial rise. Both ETFs saw tens of millions of shares traded. These funds were among the first of eleven that began trading following the SEC's approval of rule changes for exchanges the previous day, generating billions in trading volume.

The Grayscale fund, the largest of the new ETFs, transitioned from an over-the-counter trust with over $28 billion in assets. The Hashdex fund, initially a Bitcoin futures product, awaits SEC review for conversion to a spot Bitcoin product. Bitcoin itself experienced erratic trading, briefly reaching $49,000 before falling back below $47,000, resulting in a roughly 1% gain for the day, according to Coin Metrics.

Despite the heavy trading and Bitcoin's volatility, the ETFs' first day of trading was described as smooth and orderly. Rachel Aguirre, U.S. head of iShares product, reported that trading proceeded without major issues. ETFs, known for their liquidity and tax benefits, are seen as a way to simplify investment in complex assets like Bitcoin. Jonathan Steinberg, CEO of WisdomTree, emphasized that Bitcoin ETFs are designed to make Bitcoin accessible to less tech-savvy investors, potentially mainstreaming the asset class.

Investors and financial advisors will be monitoring the ETFs closely, particularly for how well they track Bitcoin’s price and the efficiency of trading volumes. Initial trading volumes, while important, may not fully predict future success. Fund issuers have also adjusted fees, with some offering temporary waivers to attract investors.