Bitcoin ETF Records $4.6 Billion in Trading Volume on First Day but Bitcoin Price Stays Static at $46,000. Here's Why.

The Bitcoin ETF started off with a decent score, recording $4.6 billion in trading volume on its first trading day. However, the price of Bitcoin remains unchanged at $46,000. Let's delve into why this is the case.

The reason lies in the Assets Under Management (AUM) of the funds not increasing. Among the 11 funds, Grayscale's $GBTC, which has the highest trading volume, had already issued an ETF with an AUM of $28 billion and 610,000 BTC. Grayscale didn't intend to attract new funds to its ETF. With a fee of 1.5% - the highest among the 11 funds - it's clear they're focusing on maintaining their existing AUM rather than attracting new capital. Therefore, the fact that GBTC topped the trading volume indicates a lack of new funds flowing into the Bitcoin ETF market as a whole.

The second-highest trading volume was recorded by BlackRock's iShares $IBIT ETF, which started with an AUM of $10 million and issued 400,000 shares. According to the iShares website, as of January 11th, the fund's Net Assets are $10,635,116 - just an increase of $635,000. Why is the inflow of new funds so low?

The entities expected to bring in the most funds to the Bitcoin ETF are brokers and Financial Advisors managing high-net-worth individuals' money. These professionals can't just recklessly add any asset to the portfolios they manage. While policies vary by company, typically, it takes about 90 days to process the inclusion of a new item in a portfolio.

Although the Bitcoin ETF has been listed and trading has begun, it might take another three months for substantial new funds to flow in. This could also indicate when the next bull market might officially start.