The Positive Impact of The Emergence of ETFs Is Prevailing

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January proved to be eventful, as the launch of ETFs, on one hand, brought an influx of new capital, while on the other hand, led to a Bitcoin correction due to Grayscale sell-offs and miners’ desire to lock in profits on the high-profile event.

In any case, the interest in the event was significant, reflected in the 4.5% increase in spot trading volume in January to $1.4 trillion – the highest level since June 2022.

Conversely, the trading volume of derivative instruments decreased by 2.8% to $3.3 trillion, resulting in the segment’s share shrinking to 69.9% – the lowest since February 2023. This indicates that investors bullish on Bitcoin largely relied on long-term purchases with the possibility of moving the asset to cold storage.

The primary trend of cryptocurrency accumulation was set by spot ETFs created from scratch (Grayscale was converted from a trust). The influx of investments into the BlackRock fund (ticker IBIT) in the past month was so impressive that it became the top performer in terms of growth since the beginning of trading among the 5535 ETFs launched in the last 30 years. Second place went to the Bitcoin ETF from Fidelity (FBTC).

Earlier, analysts at S1 Production Studio forecasted that the negative impact of Grayscale outflows would not last long. For the second consecutive week, the net inflow into crypto funds has exceeded $700 million. This has led to Bitcoin breaking above the $45,000 level.

Nine newly created ETFs recently surpassed the combined holdings of the largest public holder of Bitcoin – MicroStrategy. The company now holds 190,000 BTC, with an average purchase price of $31,200. Unrealized profit approaches $3 billion.

The effect of launching exchange-traded funds is only beginning to unfold, as not all major brokers have added ETF trading capabilities yet. However, Bitcoin ETFs have a unique feature that investors can appreciate: an open book.

Some fund managers have publicly disclosed addresses (e.g., Bitwise), while others have been identified by analytical companies. S1 Production Studio believes that Bitcoin’s advantage lies in the ability for online real-time assessment of the fund’s actual status at any given moment.


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