Bitcoin's 15th Birthday Celebration on Wall Street Sparks Investment Buzz
Bitcoin's impact on Wall Street with ETFs. Stay informed on market excitement, investor trends, and cryptocurrency dynamics in this rollercoaster ride.
Bitcoin marked its 15th birthday with a resounding entrance onto Wall Street, making headlines as investors eagerly embraced 11 new U.S. exchange-traded funds (ETFs) tracking its spot price. These ETFs, which began trading on Jan. 11 after regulatory approval, collectively held over 644,860 bitcoins, valued at more than $27 billion, after just two days of trading, according to data from analytics company Glassnode.
A significant portion of this impressive figure—more than 500,000 bitcoins—originated from the Grayscale Bitcoin Trust, which transitioned from a closed-end fund to one of the new ETFs.
Since their debut, the 11 ETFs have attracted total inflows of $4.1 billion, highlighting the growing interest in Bitcoin as a mainstream asset. This move into the world's largest stock market signifies what Glassnode calls "the end of the beginning of Bitcoin's maturation and growing-up phase," echoing sentiments from various market players who believe increased liquidity will contribute to the cryptocurrency's long-term stability.
Brent Donnelly, a currency trader and president of Spectra Markets, sees this evolution as a logical step for a security maturing from its uncertain beginnings. He anticipates that even as things normalize, the dollar value of bitcoin traded on the New York Stock Exchange (NYSE) will surpass that on the blockchain.
While the increased liquidity is a positive development, it remains to be seen whether the new Bitcoin investment products will maintain investor interest over the long term. Market participants caution that it is too early to make predictions, but the 644,860 bitcoins held by the 11 U.S. ETFs after two days represent approximately 30% of all global spot bitcoin ETF holdings, as per Glassnode data.
The launch of derivative products that capitalize on bitcoin's volatility may be on the horizon due to the heightened market liquidity, according to some market watchers.
As Bitcoin continues its journey into mainstream finance, the cryptocurrency's recent rally, triggered by anticipation of ETF approval, has captured the attention of retail and institutional investors alike. However, after reaching a two-year peak of $49,033 post-ETF approval, Bitcoin experienced a 16% dip to $40,267, remaining 40% below its all-time peak of $69,000.
In response to the market dynamics, there are indications that "whales"—investors holding over 1,000 bitcoins each—are capitalizing on gains. Glassnode data reveals a decline of about 75,000 bitcoins held by long-term holders, suggesting profit-taking. On average, long-term bitcoin holders are sitting on a 55% unrealized profit, according to the data.
Aurelie Barthere, an analyst at blockchain data firm Nansen, notes that for whales with substantial unrealized profits, monetizing part of their portfolios is a sensible move in the current market climate.