Fidelity’s spot Bitcoin exchange-traded fund (ETF), FBTC, achieved a significant milestone on January 29, recording $208 million in daily inflows. This figure surpassed the outflows from the Grayscale Bitcoin Trust (GBTC) for the first time since its launch, marking a notable shift in investor preference.
The inflow into Fidelity’s FBTC outpaced the $192 million outflow from GBTC, as reported by Farside Investors. This comparison is particularly striking given that GBTC’s outflows were the lowest since its re-launch, according to BitMEX Research data.
GBTC has been experiencing a downward trend in outflows, with a nearly 25% decrease from $255 million on January 26 and a significant 70% drop from its peak daily outflows of $641 million on January 22. The only day with lower outflows than January 29 was January 11, when GBTC was converted to a spot Bitcoin ETF, and outflows were $95 million.
Crypto traders are closely monitoring the slowing down of GBTC outflows, as this indicates investors cashing out from previously underwater positions. JPMorgan analysts have pointed out that these outflows have previously exerted downward pressure on Bitcoin’s price but believe this phase is largely over.
The combined volume of the nine new U.S. spot Bitcoin ETFs reached $994.1 million on January 29, nearly double that of GBTC’s $570 million, as per data from Bloomberg ETF analyst James Seyffart. Among these, BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s FBTC recorded the highest daily volumes, contributing to 78% of the total volume from the new ETFs.
The competitive landscape for spot Bitcoin ETFs in the U.S. has led to fund issuers reducing fees to attract investors. Invesco and Galaxy Asset Management recently announced a fee reduction for their joint ETF, the Invesco Galaxy Bitcoin ETF (BTCO), setting the expense ratio at 0.25%, down from 0.39%. This aligns BTCO’s fees with those of BlackRock, Fidelity, Valkyrie, and VanEck. BTCO will initially operate with zero fees until it reaches $5 billion in assets or for the first six months.
This fee competition in the U.S. may be influencing the European ETF market, with traders possibly shifting from Europe-based products to U.S. offerings. This speculation is supported by recent fee reductions in Europe-based Bitcoin ETFs by Invesco, WisdomTree, and CoinShares, aligning their fees more closely with those in the U.S. market.
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