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Millions of Americans banned from buying Bitcoin ETFs!

Fri 12 Jan 2024 ▪ 4 min of reading ▪ by Nicolas T.
Getting informed ▪ Invest

The Bitcoin ETF shattered all records, yet comical incidents have played the spoiler, preventing bitcoin from appreciating for the moment.

Bitcoin ETF

Historical Record for the Bitcoin ETF

In total, the first day ended with a volume of more than 4.5 billion dollars when aggregating the eleven ETFs from Blackrock, Fidelity, Tempelton, and the like.

It’s a record. No other ETF has had such a thunderous start. There were more than 700,000 trades, which is an average of 6,500 dollars per trade.

The bitcoin addresses known to Coinbase – which has custody of the bitcoins for eight ETFs – show a movement of about 450 million bitcoins. These have likely moved to addresses dedicated to the ETFs.

The most sought-after ETFs were those of Grayscale (GBTC), BlackRock (IBIT), and Fidelity (FBTC). The first recorded 34% of the trades, the second 24%, and Fidelity 21%.

In terms of total volumes, more than two billion dollars passed through the GBTC Trust, one billion through BlackRock, and 673 million via Fidelity. Cathie Wood’s Ark Invest fund – which anticipates a bitcoin at one million dollars before 2030 – dealt with 275 million dollars:

In terms of net volumes absorbed, it’s the Fidelity and BlackRock ETFs that are leading the race with 227 million and 111 million respectively.

On the contrary, the GBTC Trust (which holds more than 600,000 BTC) had net outflows totaling 941 million! Perhaps this is why bitcoin slumped yesterday.

Some suggest that many people left the GBTC Trust (which already existed) due to its management fees being nearly five times higher than its competitors (1.5%). These investors will certainly soon invest in other ETFs.

However, many of them were prevented from doing so by the major US banks.

US Banks Turn Off the Tap

Many people were unable to purchase shares of ETFs. Vanguard is especially to blame. The giant investment fund (50 million clients) stated it has no intention of offering bitcoin ETFs. Its spokesperson declared:

“The high volatility is against our goal of helping investors generate long-term positive real returns.”

Cathie Wood said that this is a “terrible decision”:

The same from Citi, Merrill Lynch, Edward Jones, UBS, and probably others. Only wealthy clients could get access to the ETFs. It takes 10 million dollars at UBS or 50 million dollars at Merrill Lynch. Small retail investors will have to wait…

Some argue that certain banks simply need time to create the gateway to the ETFs.

Gabor Gurbacs, advisor at Tether and Vaneck, says:

“It generally takes a few weeks or a few months for big banks and brokerage houses to approve and integrate new ETFs. Some have already begun to offer Bitcoin ETFs, others will take some time. It’s a standard process.”

In any case, thousands of people are in the process of closing their accounts:

“Vanguard is losing customers because the fund does not want to “allow” its clients to buy Bitcoin ETFs with their “own money”. Can you imagine the nerve! You need their permission to buy something with your money. If they don’t approve of what you’re buying, you can’t do it. Bitcoin fixes this!

In the end, the negative impact of the ETFs on the price of bitcoin will be short-lived. Let’s see what this second day has in store. Hold!

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Nicolas T. avatar
Nicolas T.

Bitcoin, geopolitical, economic and energy journalist.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.