Fidelity Bitcoin ETF Attracts $208 Million, Offsetting Grayscale Exodus
Date: 2024-01-30 Author: Dima Zakharov Categories: BLOCKCHAIN
Record Inflows for Fidelity Bitcoin ETF
Fidelity's Bitcoin ETF, known as FBTC, had an impressive day on January 29th, raking in a remarkable $208 million in daily inflows. This achievement was even more significant because it outpaced the outflows from Grayscale's GBTC, which has been a dominant player in the cryptocurrency market.
GBTC Outflows Diminish
Recent data indicates that outflows from GBTC have been decreasing steadily, dropping by nearly 25% from $255 million on January 26th to $192 million on January 29th. This decline represents a shift in investor sentiment as they take advantage of the opportunity to cash out their previously unprofitable positions.
Market Impact and Analyst Insights
The outflows from GBTC had been putting downward pressure on Bitcoin's price, according to analysts at JPMorgan. However, they believe this trend is likely to subside in the near future.
Rising Competition in the ETF Market
Despite GBTC's liquidity dominance, several new spot Bitcoin ETFs in the United States have rapidly gained momentum. Nine new ETFs collectively reached a total volume of $994.2 million, nearly doubling GBTC's volume of $570 million.
Competitive Fee Reductions
To attract investors both domestically and internationally, ETF issuers have been aggressively reducing their fees. Invesco and Galaxy Asset Management recently announced that they are lowering the fees for their joint ETF, Invesco Galaxy Bitcoin ETF (BTCO), from 0.39% to 0.25%.
European Impact
The fee war in the United States may have also influenced European ETFs, with traders possibly shifting their focus from European products to American ones. Several European ETF providers, including Invesco and WisdomTree, have slashed their fees to stay competitive.
Conclusion
The cryptocurrency ETF landscape is evolving rapidly, with Fidelity's FBTC making waves by attracting significant inflows and challenging the dominance of Grayscale's GBTC. As competition heats up, fee reductions are becoming the norm, benefiting investors looking to gain exposure to the booming cryptocurrency market.
