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Some funds have been absorbed by other spot ETF products, according to Michael Safai, Founding Partner of quantitative trading firm Dexterity Capital. He stated, "Many investors are waiting for a significant narrowing of the Grayscale discount before unwinding positions. Now that the discount has nearly disappeared, some traders may have sold and are waiting to re-enter ETFs as soon as possible."
BlackRock's spot Bitcoin ETF (IBIT) surpassed $1 billion in fund inflows, becoming the first ETF in its category to achieve this milestone.
Following closely, Fidelity Investments saw a fund inflow of $358 million into its FBTC, marking the highest daily inflow since the fund's launch a week ago, with a total inflow of approximately $880 million. BlackRock and Fidelity attracted 68% of the total inflows of nearly $2 billion into the market's nine new ETFs.
Among the 11 spot Bitcoin ETFs, Grayscale has the highest management fee in the industry, at 1.5%. Franklin Templeton's fee is the lowest at 0.19%, but its recent fund inflow accounts for less than 2% of all products. Ark Invest has a zero first-year fee, followed by a 0.21% fee. The world's largest asset management company, BlackRock, charges 0.12% in the first year, increasing to 0.25% thereafter.
JPMorgan analysts suggested in a report that the situation for GBTC might worsen, as the investment bank estimates that the fund could experience outflows of up to $10 billion.
JPMorgan stated, "Liquidity and market depth are also crucial, but if other spot Bitcoin ETFs reach critical mass in terms of size and liquidity, GBTC will also face risks in this regard."
Liquidity typically refers to the ability to sell assets for cash. Reduced liquidity poses risks to investors as they may find it challenging to sell shares. The report mentioned, If GBTC loses its liquidity advantage, there may be more capital outflows, perhaps an additional $5 billion to $10 billion. |
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Post time 2-2-2024 20:28:00