Bitcoin ETFs: $4.6B Wall Street Splash

Plus Inflation Ticks Up: December's CPI Spike

Author

Nathaniel Whittemore
January 12, 2024

The Breakdown First Five - Friday, January 12, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

BTC ETF Wall street splash

5. Vanguard Denies Bitcoiners

The twist in yesterday’s ETF launch came from multiple brokerage’s denying access to the new Bitcoin products. While some caused by compliance and risk assessment delays, Vanguard said outright that Bitcoin’s volatility was incompatible with their investment philosophy. Last week, GBTC was a perfectly acceptable investment in Vanguard accounts, but now their clients are only allowed to sell. 

4. Inflation Ticks Up

December’s inflation data showed the highest headline CPI rate in 3 months, running at a 3.4% annualized rate. Although six rate cuts are still priced in from March, another inflationary wave would make a cutting cycle difficult to imagine. While the Fed looks for its soft landing, trouble in the Middle East has pushed up shipping costs and put oil on notice. 

3. Warren Hates Bitcoin ETFs

Senator Elizabeth Warren is not happy that the SEC approved Bitcoin ETFs. She said the SEC was “wrong on the law and wrong on the policy”, implying they should have made up a new reason to deny the products. Notable members of the anti-crypto army echoed this sentiment, suggesting the SEC should have simply ignored the court order against them. 

2. ETF Day Turns Red

The first day of trading for Bitcoin ETFs was a mixed bag. Pre-market saw the price swiftly climb to a new 2-year high on the open. Sentiment quickly turned, with Bitcoin dramatically plunging to complete a round trip by lunchtime. More than $83M of liquidations washed out traders on both sides of the speculation as Wall Street welcomed Bitcoin to the big leagues.

1. Massive Volume, Questionable Flows

Bitcoin ETFs made a big splash in their Wall Street debut, trading over $4.6B in volume. Blackrock topped new entrants with $1B changing hands, with GBTC moving $2.3B and BITO registering $2B. During the session analysts suggested money may have simply been exiting the older products to buy the new and first reports of flow data paint a dismal picture. Bitcoin’s Wall Street debut may have seen net outflows once the final figures are tallied. 

Thanks for reading -NLW