Two days after approval, spot Bitcoin exchange-traded funds (ETFs) are receiving significant inflows, according to data from BitMEX Research.
The analytics firm reported net inflows totaling $532 million for spot Bitcoin ETFs, with BlackRock IBIT leading the way with $498 million. Fidelity’s FBTC followed with $422 million, while 21 Shares’ ARKB recorded net inflows of $105 million.
However, not all funds benefited. As Bloomberg analyst James Seyffart reported in
Bitwise posted impressive second day performance.
Interestingly, despite GBTC leading in terms of assets, Bitwise stood out as the winner on day one. Nonetheless, BitMEX Research suggests that GBTC could face significant outflows in the coming days, weeks, and months due to high fees of 1.5%.
At the time of this writing, other smaller players, including Hashdex and Valkyrie, are still waiting for accurate data, while Fidelity had a solid performance with $195 million on the second day. BlackRock also reported significant $386 million inflows on the second day, bringing its two-day total to nearly $500 million, potentially taking the lead.
While these numbers are undoubtedly surprising, Bloomberg analyst Eric Balchunas noted today that GBTC’s activity will not be reflected in flow data until Tuesday night, reminding us that these numbers should capture Thursday’s activity.
As the dust settles, it will be interesting to see how these numbers evolve and shape the story of the spot Bitcoin ETF.
Approval of Spot Bitcoin ETF Sparks Fierce Competition
The U.S. Securities and Exchange Commission’s (SEC) approval this week of 11 spot Bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust and Grayscale Bitcoin Trust, was a game-changer for the digital asset industry. This struggle has been going on for a decade in the race to attract investors.
Within a day of approval, the Bitcoin ETF recorded an impressive $4.6 billion in traded shares, marking a watershed moment for the cryptocurrency industry and gaining wider acceptance as a viable investment.
But the landmark approval also sparked a brutal fight for market dominance, with some companies slashing fees below the U.S. ETF industry standard even before launch.
For example, after ETF trading began, Valkyrie reduced its fees twice, finally settling them at 0.25% and waiving these fees for the first three months. Franklin Templeton cut its Bitcoin ETF fees to 0.19%, a low not yet seen, and waived fees entirely on the product’s first $10 billion in assets until August.
The launch of these ETFs pushed Bitcoin (BTC) price to its highest level since December 2021, with Bitcoin last up 0.77% at $46,303.
Analysts advise caution
Investors and market participants were keenly watching the price difference between ETF buys and sells, commonly known as the bid-ask spread. ETFs with narrow spreads are generally considered more attractive.
However, some traditional asset managers, such as Merrill Lynch and Vanguard, have said they have no plans to allow spot Bitcoin ETF trading, warning the cryptocurrency community that many people still perceive the cryptocurrency as risky. Reminded and cautioned.
Despite this caution, several cryptocurrency asset managers who went all-in on Bitcoin ETFs recorded impressive inflows on the first day of the product’s listing. For example, Bitwise reported $240 million in inflows into spot Bitcoin ETFs.
Fidelity and BlackRock received $227 million and $111.7 million, respectively. Franklin Templeton and 21 Shares recorded inflows of $50.1 million and $65.3 million, respectively.
Valkyrie reported inflows of $29.44 million on its first trading day alone, celebrating what CEO Leah Wald described as a “successful trading day.”