- In January, despite Grayscale Bitcoin Trust’s aggressive sell-off, the U.S. spot Bitcoin ETF ecosystem collectively added around 10,000 BTC.
- GBTC dumped over 132,000 BTC, but other ETFs compensated by adding over 142,000 BTC to their holdings.
- The total holdings of all ten spot Bitcoin ETFs rose by 1.6%, showcasing resilience in the face of market volatility.
This article explores the dynamics of the spot Bitcoin ETF market in the U.S., highlighting the significant activity in January, including Grayscale Bitcoin Trust’s sell-off and the overall increase in Bitcoin holdings by other ETFs.
GBTC’s Major Bitcoin Sell-Off in January
January saw a major sell-off from the Grayscale Bitcoin Trust (GBTC) ETF, which offloaded a total of 132,195 BTC, reducing its holdings by 21%. This significant reduction brought down GBTC’s Bitcoin stash from 619,220 BTC to 487,025 BTC by the end of the month. Despite this substantial sell-off, the overall market showed resilience.
Rising Holdings in Non-GBTC ETFs
Counterbalancing GBTC’s sell-off, the nine other active spot Bitcoin ETFs significantly increased their holdings. These funds collectively added 142,294 Bitcoin, marking an impressive 674% increase in their holdings since the start of the trading period. By January 31, these non-GBTC ETFs held a total of 160,684 BTC.
Collective Growth of Spot Bitcoin ETFs
As of January 31, the combined holdings of all ten spot Bitcoin ETFs amounted to 647,709 BTC, up by approximately 1.6% from their initial holdings of 637,610 BTC. This growth is noteworthy, considering the significant price drop Bitcoin experienced over the same period, declining about 8% in 30 days.
Shifts in Largest Bitcoin Fund Holdings
Amid these developments, BlackRock’s iShares Bitcoin ETF, which reportedly held 57,488 BTC, sold about 6,000 BTC in late January. This move resulted in iShares ceding its position as the second-largest spot Bitcoin fund by holdings to Fidelity’s Wise Origin Bitcoin Fund (FBTC), which held 58,400 BTC as of January 31.
Market Impact and Analyst Perspectives
Despite the overall increase in Bitcoin holdings by spot ETFs, Bitcoin’s price experienced turbulence, dropping below $39,000 at one point. Analysts had previously described the launch of spot Bitcoin ETFs in the U.S. as a “sell the news” moment, with expectations of pressure from futures markets. ARK Invest CEO Cathie Wood suggested that some investors might “sell on the news” of spot Bitcoin ETF approval, yet maintained a promising long-term outlook for the asset.
Conclusion
In conclusion, January’s developments in the U.S. spot Bitcoin ETF market reflect a complex interplay of aggressive selling by GBTC and compensatory buying by other ETFs. The overall increase in ETF holdings, amidst market volatility and price drops, suggests resilience and continued investor interest in Bitcoin ETFs. This landscape offers a nuanced view of the current state and future potential of Bitcoin as an investment asset.
