BlackRock’s Bitcoin ETF Surpasses Grayscale in Trading Volumes
The spot Bitcoin ETF from BlackRock has now exceeded the trading volumes of Grayscale Investments’ similar ETF. Previously, Grayscale’s Bitcoin Trust ETF (GBTC) had been leading in trading volumes for the first three weeks of trading for these types of products in the U.S. During that time, GBTC accounted for nearly half of the trading volumes, accumulating around $14.4 billion out of a total of $29.3 billion. However, BlackRock’s iShares Bitcoin Trust (IBIT) recently experienced higher numbers, reaching $302 million in trading volumes compared to GBTC’s $292 million.
GBTC Faces Net Outflows and Higher Fees
Despite GBTC’s significant trading activity, it has seen net outflows totaling $5.6 billion since transitioning to an ETF. Many Grayscale investors have been eager to divest from GBTC due to its previous restrictions on selling trust shares at their net asset value. Additionally, GBTC has a fee structure with a 1.5% fee, which is considerably higher than its competitors’ expense ratios ranging between 0.19% and 0.39%. Observers anticipate that GBTC’s investor base will continue executing strategies affecting the fund’s inflows and outflows.
Grayscale Adjusts Bitcoin Holdings as Outflows Continue
In response to the outflows from Grayscale, the trust has decreased its Bitcoin holdings by 5,086 BTC valued at around $218 million. Meanwhile, BlackRock’s IBIT and Fidelity Wise Origin Bitcoin Fund (FBTC) have seen substantial net inflows of approximately $2.8 billion and $2.5 billion respectively since their market debut. Despite the outflows from Grayscale, the total net inflows into the 10-spot Bitcoin ETFs have surpassed $1 billion. The overall trading volume for all active spot Bitcoin ETFs is nearing $27 billion, which has helped improve market sentiment for Bitcoin.
Invesco and Galaxy Asset Management Reduce Fees
In a competitive move, Invesco and Galaxy Asset Management have announced a reduction in their fund’s fee from 0.39% to 0.25%, aligning them with most competitors in the market. This adjustment aims to attract more investors and remain competitive within the growing Bitcoin ETF landscape.
Hot Take: Increased Competition Drives Shift in Bitcoin ETF Trading Volumes
The competition between BlackRock’s spot Bitcoin ETF and Grayscale’s Bitcoin Trust ETF reflects the evolving landscape of cryptocurrency investment products. While GBTC initially dominated trading volumes, BlackRock’s IBIT has now taken the lead. These shifts highlight investor preferences for lower fees and greater flexibility in selling trust shares at their net asset value. As more players enter the market, such as Invesco and Galaxy Asset Management, we can expect further adjustments to fees and strategies as they vie for a larger share of the growing Bitcoin ETF market.
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