TL;DR
- Fidelity’s Bitcoin ETF, FBTC, attracted daily inflows of $208 million on January 29, surpassing GBTC outflows for the first time since its launch.
- Nine new ETFs accumulated $994.1 million on January 29, nearly double GBTC’s volume, with BlackRock and Fidelity leading with $460.9 million and $315.4 million, respectively.
- Competition in U.S. ETFs led to fee reductions, impacting the European market.
Fidelity’s Spot Bitcoin Exchange-Traded Fund (ETF), FBTC, achieved a notable milestone by attracting substantial daily inflows of $208 million on January 29, 2024. This achievement is significant as it surpassed outflows from the Grayscale Bitcoin Trust (GBTC) for the first time since its inception.
Provisional data from Farside Investors revealed the influx of $208 million into Fidelity’s FBTC on Monday. In contrast, GBTC experienced outflows totaling $192 million on the same day, marking its lowest daily outflows, excluding its re-launch, according to BitMEX Research data.
And @Grayscale's $GBTC maintains its liquidity crown — trading $570 million and ~$110 million more than second place $IBIT today https://t.co/WIAWKwDnqY pic.twitter.com/ma0CE5szLa
— James Seyffart (@JSeyff) January 29, 2024
These developments follow a nearly 25% drop in GBTC outflows from $255 million on January 26 and a substantial 70% decline from the fund’s peak daily outflows of $641 million on January 22. It’s noteworthy that the $95 million that left the fund on January 11, the day it transitioned into a spot Bitcoin ETF, remains the lowest outflow day for Grayscale’s fund.
The crypto market closely monitors GBTC outflows associated with downward pressure on Bitcoin prices. However, JPMorgan analysts suggest that the worst may be over concerning GBTC-related outflows, providing some relief to BTC investors.
On January 29, 2024, data revealed that nine new U.S. spot Bitcoin ETFs collectively amassed an impressive volume of $994.1 million. This figure is nearly double that of GBTC, which recorded $570 million in volume during the same period.
BlackRock and Fidelity Lead a Turbulent Market of Bitcoin ETFs
BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC) emerged as significant players among these new ETFs, with daily volumes of $460.9 million and $315.4 million, respectively. These two funds accounted for 78% of the combined volume generated by the nine new ETFs.
The competitive landscape in the spot BTC ETF market prompted fund issuers to reduce fees to attract investors in the United States and internationally. Notably, Invesco and Galaxy Asset Management announced on January 29 that they would lower the expense ratio of their joint ETF, Invesco Galaxy Bitcoin ETF (BTCO), from 0.39% to 0.25%.
This fee reduction aligns BTCO’s expenses with those of other major players in the market, including BlackRock, Fidelity, Valkyrie, and VanEck. Furthermore, BTCO has implemented a unique offer of zero fees for the first six months or until it accumulates $5 billion in assets; at this point, the lower fee will take effect.
The fee wars in the United States have had repercussions beyond its borders, affecting Europe’s ETF market. There is speculation that traders are shifting their investments from Europe-based products to the United States, as research from CoinShares indicates.
Notably, Invesco reduced fees on its Europe-based Bitcoin ETF from 0.99% to 0.39% on January 23, 2024, and WisdomTree followed suit by cutting fees from 0.95% to 0.35%. CoinShares also joined the trend on January 25 by reducing fees on its flagship Bitcoin ETF from 0.98% to 0.35%.
