FxNews—Bitcoin ETFs have become a major highlight in the financial world this year, particularly for being the most successful launch ever. From the beginning of the year on January 11, these funds have seen a massive influx of investments, totaling $18.9 billion.
Excluding the Grayscale Bitcoin Trust, which alone holds 223,000 BTC, the nine new ETFs collectively have about 646,000 BTC. Together, these funds possess 869,000 BTC, around 4% of all currently circulating bitcoins.
Top New ETFs of 2024: Bitcoin Takes Center Stage
2024 marks a significant year with the introduction of 2,000 ETFs, including notable ones like the iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund. These two are among the top ten regarding asset size, highlighting their importance and impact.
Despite their popularity, Bitcoin ETFs represent only a small section of the overall market, with just a fraction of trading volumes compared to other market activities. For instance, on October 11, the total trading volume for Bitcoin ETFs was $2 billion, merely 3% of the total market volume.
Basis Trade Strategy: Profiting from Price Gaps
The basis trade involves a strategy where investors buy the underlying asset while shorting the futures contract, aiming to profit from the premium difference between the spot and futures prices.
This strategy is appealing as it is neutral to market direction and focuses instead on price convergence to earn profits.
Key Investors in Bitcoin ETFs
Data from Fintel reveals that major financial entities like Goldman Sachs and Jane Street Capital play significant roles in managing ETF shares. Other notable investors include hedge funds like Millenium Management and Capula Management, many of which engage in the basis trade.
According to Bernstein, the basis trade might catalyze broader ETF adoption and liquidity growth. The potential introduction of physically settled options linked to ETFs could further enhance opportunities for earning and hedging in this space, suggesting a bright future for Bitcoin ETFs.
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.
