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Canada’s BTC ETF Is Experiencing Slump in Activity

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Canada’s first bitcoin exchange-traded fund (ETF) was released to the public not too long ago. The idea of a bitcoin-based ETF had been in the back of investors’ minds for some time, and now that the product has been unveiled, it looks like many fantasies are becoming real, but is it possible that the product has already worn out its welcome?

The First Bitcoin ETF Is Already Seeing Trading Dips

According to new data, trading in the bitcoin-based ETF has already taken a serious dive, with transactions slowing down significantly from just last week. To be fair, we see this all the time with individuals. They want something so bad that they build it up in their heads. They obsess about it, they can’t stop thinking about it, and yet, when they finally get it or indulge in it, the excitement only lasts about ten minutes or so.

It appears they built it up so big in their heads that the reality of the product or event, whatever it may be, was far less joyous than the fantasy that was behind it. Could this be the case with the bitcoin ETF? Canada was the first country in the world to get the product approved, beating several rivals such as the United States for its place at the front of the line. However, not long after things began moving, they are already beginning to slow down.

The first bitcoin-based ETF was known as the Purpose Bitcoin ETF. It trades under the ticker BTCC and saw more than $17 million shares traded in just the first few days of its availability. Not long after, that $17 million shot up to about $400 million. By the early part of this week, the total peaked at a whopping $500 million. That’s half a billion dollars in a relatively short period.

Now that things have taken a serious slump, men such as Ben Johnson – Morningstar’s global director of ETF research – are working hard to explain what the problem could be. In a recent interview, he states:

The initial surge in interest was evidence of some combination of pent-up demand, investors switching from other means of getting bitcoin exposure, and the fact that bitcoin’s price was notching new highs as the Purpose ETF began trading. Longer term, I expect volumes will be correlated with bitcoin’s price.

Maybe This Can’t Be Attributed to Lagging Demand

In other words, it’s not so much that people’s demand has suddenly been waning. Rather, the ETF will work in tandem with bitcoin’s price, and thus if the currency is experiencing some sort of neutral period, like it is now, the ETF is likely to follow suit.

At press time, bitcoin has risen somewhat and is trading for around $50,400 per unit. This is certainly an improvement over the $47,000 it was experiencing last week, but it’s not a huge boost.

The post Canada’s BTC ETF Is Experiencing Slump in Activity appeared first on Live Bitcoin News.

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Source: https://www.livebitcoinnews.com/canadas-btc-etf-is-experiencing-slower-activity/

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