The Spot Bitcoin ETF’s First Week
The first trading day for U.S.-based spot bitcoin exchange-traded funds saw a high collective volume surpassing $4.6 billion with Grayscale Bitcoin Trust dominating shares.
BlackRock’s Milestone and Fidelity’s Entry
Within the first four days, BlackRock’s spot bitcoin exchange-traded fund (ETF) amassed $1 billion in assets. Shortly after, Fidelity joined by also amassing $1 billion in assets, as the leading players controlled 90% of the total volume.
Spot Bitcoin ETF Trading Insights
The total trading volume for the 11 spot bitcoin ETFs reached $16.4 billion, and Grayscale held the most significant market share of nearly 53%. Meanwhile, BlackRock and Fidelity are the primary contributors, commanding over 90% of the total volume.
Eric Balchunas’ Analysis and Market Interest
Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, noted that BlackRock and Fidelity’s spot bitcoin ETFs led in new capital inflows among cryptocurrency instruments in U.S. Bitcoin ETFs have eclipsed silver ETFs in size due to significant market interest.
BTC Price and GBTC Outflow
Despite the new spot Bitcoin ETFs, the BTC price struggles and is aiming to drop below the $40K level. The outflows from Grayscale potentially created newfound supply, leading to the negative netflow and a bearish impact on BTC price.
Impact of Grayscale’s Expense Ratio
Grayscale’s 1.5 percent expense ratio coupled with massive outflows is impacting the BTC price, raising questions about the ETF’s rationality. Most of the 11 spot Bitcoin ETFs trading since approval are lowering fees to between 0.2%-0.4%, with some offering temporary fee waivers. In contrast, Grayscale charges up to 1.5% without waivers.
Hot Take
While there is significant market interest in Spot Bitcoin ETFs, there are concerns about the impact of Grayscale’s expense ratio and the potential for increased BTC supply due to outflows.
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