The impact of the introduction of spot ETFs on bitcoin

Abstract

This. dissertation examines the short-run effect of the January 2024 listing of spot Bitcoin Exchange-Traded Funds (ETFs) on the market dynamics of Bitcoin. Driven by increased institutional adoption and research in cryptocurrency markets, this study investigates whether the listing of funds like IBIT (iShares Bitcoin Trust), FBTC (Fidelity Wise Origin Bitcoin Fund), and GBTC (Grayscale Bitcoin Trust, on spot conversion) introduced quantifiable implications on the price returns, volume, and market capitalization of Bitcoin. To address this question, the study uses a hybrid event study approach through OLS and GARCH(1,1) model to identify abnormal returns and volatility patterns. Based on daily data gathered from September 2023 to March 2025, the study identifies an event window around the date of approval of the ETF and classifies expected and actual market behavior. No short-term statistically significant abnormal returns occur in any of the three measures investigated. Although GARCH models imply temporary volatility relationships and trading volume as a primary amplifier, the event itself also did not create quantifiable return anomalies. Such findings are also confirmed by robustness tests with an extended event and estimation windows and again reflect no significant influences. Overall, the research discovers that the ETF approval, while structurally important, was well absorbed by the market in the near term.