BlackRock and Fidelity ETFs Show More Market Breadth Than GBTC
JPMorgan analysts have found that BlackRock and Fidelity’s bitcoin exchange-traded funds (ETFs) outperform Grayscale Bitcoin Trust (GBTC) in terms of market breadth. They used two liquidity metrics to compare the funds.
Market Breadth Metric
The first metric, known as the Hui-Heubel ratio, measures market breadth. JPMorgan analysts discovered that BlackRock and Fidelity ETFs have around four times more market breadth than GBTC.
Price Deviation Metric
The second metric examines how much ETF closing prices deviate from their net asset value (NAV). The analysis shows that the price deviation for BlackRock and Fidelity spot bitcoin ETFs is similar to that of SPDR Gold Shares ETF, indicating improved liquidity. On the other hand, GBTC has higher deviations, suggesting lower liquidity.
Implications for GBTC
While these metrics do not capture market depth, they indicate that BlackRock and Fidelity’s bitcoin ETFs have an advantage over GBTC in terms of liquidity. If GBTC fees are not reduced, the fund may experience more outflows and lose funds to other ETFs.
Hot Take: GBTC Faces Liquidity Challenge Against BlackRock and Fidelity
JPMorgan’s analysis reveals that BlackRock and Fidelity’s bitcoin ETFs surpass GBTC in terms of market breadth and liquidity. This could pose a significant challenge for GBTC if its fees are not lowered. As investors seek more liquid options, it remains to be seen how GBTC will adapt to this changing landscape.
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