(Bloomberg) -- Wall Street may be divided over crypto’s investment credentials but for Bitcoin brethren Thursday delivered validation: The first US exchange-traded funds investing directly in the largest digital currency finally went live. 

It was a much-anticipated debut that came a day after the US Securities and Exchange Commission gave them the green light following a more than decade-long campaign by the digital-asset industry. 

The batch of almost a dozen funds — including offerings from investment powerhouses BlackRock Inc. and Fidelity Investments — got off to a strong start, with some $4.6 billion of shares changing hands in a frenetic first day. Industry backers see the ETFs as the ultimate springboard for broader mainstream adoption by everyday investors and the catalyst for further gains.

“Easily the biggest splash in ETF history for a first day,” said Eric Balchunas, senior ETF analyst at Bloomberg Intelligence. “No matter where you look, it’s superseded expectations.”

Bitcoin at one point on Thursday surged past $49,000 to levels last seen in 2021 before falling back to $46,075 as of 9:30 p.m. in New York. Other major tokens were mixed as speculators took stock of the outlook.

Here are some of the highlights, and look at what’s next: 

Trading Records

Thursday’s debuts included some record-breaking activity: With $2.3 billion exchanging hands, the Grayscale Bitcoin Trust saw the largest-ever first-day turnover for an ETF. To be sure, Grayscale’s product has existed in a trust structure since 2013, and had a nearly $27 billion head-start in asset size. 


But even ETFs that did not convert from an existing fund have seen historic trading volumes. BlackRock’s iShares Bitcoin Trust — IBIT — saw $1 billion change hands, the fifth-largest ETF launch on record. 

Trading volume doesn’t indicate a full picture of the nature of buying or selling or investor inflows. Because of the way the funds settle trades, net flows into or out of the products probably won’t be known until at least Friday.


Ultimately, the ETFs won’t be successful in the long term unless investors are able to easily access them, and that remains an issue. 

Vanguard Group Inc.’s brokerage arm will not offer trading in the ETFs, while Bank of America Corp.’s Merrill Edge is still evaluating whether to provide that service. Other platforms, however, are more eager to jump on the bandwagon. Robinhood Markets Inc. Chief Executive Officer Vlad Tenev said in an X post Wednesday that the brokerage is planning to list the funds “as soon as possible.” Charles Schwab made the ETFs available on its platform.  

There are still lingering questions. As with any ETF, it’s unclear when major distribution platforms will choose to offer the spot Bitcoin products. Yet to crypto bulls, the victory in many ways lies in the funds’ very existence.

“What an ETF represents for Bitcoin adoption extends beyond the immediate inflows into these products, potentially reshaping the market in entirely unprecedented ways,” Coinbase Global Inc. said in a report. “Nevertheless, we think this will take time to unfold.”

Fee War 

While fee wars are a common feature of the $8 trillion ETF arena, the battle to lower costs broke out before the spot Bitcoin ETFs launched. BlackRock, Ark Investment Management and Invesco were among the issuers who dropped their costs in the days leading up to Wednesday’s approval.

The fact that all the products launched on the same day — removing the potential first-mover advantage — and hold the same underlying asset added extra fuel to the race-to-the-bottom on fees. Several firms turned to fee waivers in a bid to stand out, offering their ETFs for free for the first six or twelve months.

“It’s like two years worth of fee wars have been condensed into a couple days,” said Bloomberg Intelligence’s Balchunas.

The Bitwise Bitcoin ETF (ticker BITB) is the lowest-priced offering at an eventual fee of just 20 basis points, with an initial sweetener of zero fees for the first six months or until the fund reaches a certain asset threshold. Fees on nearly all of the ETFs that began trading Thursday range between 20 basis points to 49 basis points. The Grayscale Bitcoin Trust (GBTC) is the outlier with a fee of 1.5%.

Galaxy Digital’s Steve Kurz, whose firm launched the Invesco Galaxy Bitcoin ETF in partnership with Invesco, says that fees aren’t the end-all for investors and advisers evaluating the funds. BTCO will charge 0.39% after an initial six-month fee waiver.

“What’s the point of talking about a few basis points of fees when you are talking about how you manage the liquidity of a very volatile underlying asset?” Steve Kurz, global head of asset management at Galaxy Digital, said on Bloomberg Television.

What’s Next

One of the next stages of Wall Street adoption will be when options tied to these ETFs are approved. The derivative instruments are favored by investment professionals as a way to make wagers on future gains or hedge against losses. Cboe Global Markets Inc. currently expects the SEC will approve options trading later in 2024. 

Meantime, hours after the products began trading, the ETF machine cranked out a new filing: The Grayscale Bitcoin Trust Covered Call ETF, which will seek income and exposure to GBTC. 

“Historic feels like the right description,” said Todd Sohn, an ETF strategist at Strategas. “Now the real work begins to see who has staying power.”

--With assistance from Isabelle Lee.

(Updates with Bitcoin prices in the fifth paragraph.)

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