BlackRock's Bitcoin ETF: A Potential $3B First-Day Inflow, Says CF Benchmarks

• Historic Approval of Spot Bitcoin ETFs by SEC
• iShares Bitcoin Trust Setting Record Inflows
• A Historic Day for ETFs
• Significance of Spot Bitcoin ETFs
• Potential Impact on the Crypto Market

Historic Approval of Spot Bitcoin ETFs by SEC

The Securities and Exchange Commission (SEC) made a historic decision to approve spot bitcoin (BTC) exchange-traded funds (ETFs) in the U.S. This groundbreaking decision could potentially lead to the largest first-day inflow of funds into a specific ETF in history.

iShares Bitcoin Trust Setting Record Inflows

The iShares Bitcoin$42,260 -0.64% Trust (IBIT), a spot offering from traditional finance behemoth BlackRock, may conclude its first trading day with a record-breaking $3 billion in inflows. This prediction is made by cryptocurrency index provider CF Benchmarks, a subsidiary of crypto exchange Kraken that provides indexes for six of the newly launched ETFs, including BlackRock's.

A Historic Day for ETFs

Sui Chung, CEO of CF Benchmarks, states, IBIT is on course to make ETF history today. He highlights that in the first 30 minutes of trading alone, the product attracted $400 million in inflows. This could potentially lead to a $3 billion in assets under management (AUM) by the close of the day, marking the largest debut in ETF history.

By 10:15 a.m. ET (15:15 UTC) on Thursday, Grayscale and BlackRock's bitcoin spot ETFs took the lead in terms of volume, BitMex Research reveals.

Significance of Spot Bitcoin ETFs

Spot bitcoin ETFs represent a crucial milestone for the cryptocurrency industry as they allow virtually any investor to gain exposure to the largest digital asset. This opens a gateway for investors to step into the sector without the need for a crypto exchange. Chung explains, This speaks to the level of hitherto untapped demand from investors - who can't or won't custody physical bitcoin - to gain bitcoin ownership through a regulated financial product.

Potential Impact on the Crypto Market

Chung suggests that the ETF is likely to generate more demand. This would then compel market makers to assign more capital to support that liquidity. This is particularly significant as crypto market liquidity is yet to fully recover from the FTX$3.28 -5.38% crash in November 2022. This move could thus potentially benefit the entire crypto ecosystem, especially as it begins to attract attention from a new group of investors.

Edited by Jonathan Stoker