February 28, 2024

Activities within the ETF market scaled higher following the SEC’s recent approval of spot Bitcoin ETFs. The US Securities and Exchange Commission (SEC) approved 11 spot BTC ETF applications on January 10, 2024.

Among all existing players in the ETF market, BlackRock and Fidelity’s spot BTC ETFs took the lead in performance scale. The two ETFs recorded the largest debut in their first month, more than others in the US in 30 years.

BlackRock and Fidelity’s ETFs Amassed Over $3 billion in Assets Separately

Data from Bloomberg Intelligence revealed the outstanding performance of BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC). 

According to the details, ETFs amassed over $3 billion in assets each within the first 17 days of trading.

This indicated the two ETFs as the only ones to hit such a record among the over 5,500 existing ETFs. Bloomberg ETF analyst Eric Balchunas confirmed the new development through a post on X on February 8. He stated that both IBIT and FBTC are in a league of their own.

After their launch over the past three decades, analysts tagged them as the top-performing ETFs. He noted that within the first month of trading, the two ETFs attracted more assets than others in the country.

However, Balchunas indicated that the analysis focused only on those ETFs that emerged during the same launch period. 

It doesn’t account for any conversion, such as the almost 100 conversions of mutual funds to ETFs and GBTCs that occurred. Notably, these converted ETFs carried over their pre-existing assets before conversion.

Also, the analysis didn’t count the ETFs’ initial assets under management (aum) as ‘flows.’

Analyst Says Stiff Competition Remains The Driving Force For IBIT And FBTC Loud Performance

Further, the analyst noted the large outflows from Grayscale’s Bitcoin ETF (GBTC). He pointed out that most GBTC outflows came through FTX and prop traders.

This reflects a discount that may not be specific to another BTC ETF. However, IBIT and FBTC have had impressive results through daily inflows since their launch.

The analyst described it as “Literally unprecedented” and believed stiff competition remains the driving force. Balchunas stated:

I think the real unseen force here is competition. 10 ETFs launching the same day w/ some stud issuers just made everyone hustle their ass off, work every poss angle for inflows.

Moreover, an earlier report from Yahoo Finance based on JPMorgan (JPM) research disclosed the potential trend for ETFs. The report noted that Blackrock and Fidelity’s spot Bitcoin ETFs already have leverage over Grayscale’s regarding some liquidity metrics.

According to the report, IBIT and FBTC offer far lower fees to clients compared to GBTC’s high charges. Grayscale set an initial fee of 2% while converting to a spot Bitcoin ETF.

However, the firm later dropped it to 1.5%, which is still five- times higher than most ETF fees in the industry.


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