Bitcoin Spot ETF race sees Grayscale capture major share of trades on day 1, BTC price hits two-year peak

Bitcoin Spot ETF trading volume, dominated by Grayscale’s GBTC, totaled more than $4.6 billion on Thursday.
Bitcoin ETFs registered 700,000 individual trades, doubling those in the Nasdaq 100’s tracking fund QQQ.
BTC price hit a peak of $48,900 for the first time since December 2021, but corrected to $46,000 on Friday.

Bitcoin (BTC) price falls to around $46,000 during Friday’s Asian session, correcting from the two-year high of $48,900 seen on Thursday. Bitcoin’s rally was likely caused by rising market interest following the US Securities and Exchange Commission’s (SEC) approval of spot exchange-traded funds (ETF) that track Bitcoin’s price.

During the first trading day of the ETFs on Thursday, around 700,000 individual trades were registered and trading volume exceeded $4.6 billion.

Daily digest market movers: Bitcoin ETF trades explode, Grayscale gets major share

Bitcoin ETFs completed over $4.6 billion in trade volume on their first day.
Grayscale captured nearly half this trade volume. However, Bloomberg ETF analyst James Seyffart attributes this to entities selling their GBTC shares for other ETFs, in lieu of fees and other factors.
ETF issuers are competing in the so-called by analysts “Cointucky Derby”, slashing their fees to attract more traders and capture a larger market share. Bitwise Invest currently offers the lowest fee at 0.2%.
The trading volume in Bitcoin Spot ETFs lagged when compared to the QQQ – the ETF that tracks the Nasdaq 100 – However, it recorded around 700,000 trades, nearly double the number of the QQQ, Bloomberg’s Senior ETF analyst Eric Balchunas said.

All told there were 700,000 individual trades today in and out of the 11 spot ETFs. For context, that is double the number of trades for $QQQ (altho it sees much bigger $ volume bc bigger fish use it) So a lot more grassroots action (vs big seed buys) than I expected which is… pic.twitter.com/syUGfjHQpr
— Eric Balchunas (@EricBalchunas) January 11, 2024

Greekslive ambassador behind the X handle @4adybug said the Bitcoin ETF inflow was at a reasonable level for day one, with neither too much nor too little and in line with what was expected. The ETF approval makes the US time zone more important than the futures market, according to the crypto expert, and Bitcoin price is likely to remain rangebound between $48,000 and $53,000.

Technical Analysis: Bitcoin price hits two-year peak as $45,000 remains key

Bitcoin price hit a two year peak on Thursday as it crossed the $48,900 level for the first time since December 2021. This makes the $45,000 support an important area for BTC. Greekslive ambassador @4adybug said that in the event that Bitcoin slips below this level without a quick recovery, it can be considered a signal of reversal in the current uptrend.

If Bitcoin price sustains above $45,000 and moves sideways, it opens up opportunities for altcoin trades, he said.

To the upside, Bitcoin gains are likely capped at the 61.8% Fibonacci retracement level of the asset’s decline between November 2021 and 2022, which is set at $49,400. BTC price could, therefore, rally towards this target before seeing a pullback.

BTC/USDT 1-day chart

Open Interest, funding rate FAQs

How does Open Interest affect cryptocurrency prices?

Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.

How does Funding rate affect cryptocurrency prices?

Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.

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