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Fidelity Bitcoin ETF 208M Dollar Inflow Offsets Grayscale Outflows

Key Takeaways
  • Fidelity Bitcoin ETF attracted $208 million in daily inflows on January 29, outperforming Grayscale's GBTC for the first time since launch.
  • BlackRock's IBIT and Fidelity's FBTC dominate the spot Bitcoin ETF market with daily volumes of $460.9 million and $315.4 million.
  • Fee reductions in the U.S. ETF market may be prompting traders to shift from Europe-based ETFs. Invesco and WisdomTree recently cut fees on their Europe-based Bitcoin ETFs.
30-Jan-2024 By: Sudeep Saxena
Fidelity Bitcoin ETF

Fidelity Bitcoin ETF Records Inflows, Grayscale Outflows For 5th Day

On January 29, Fidelity's spot Bitcoin exchange-traded fund (ETF) reportedly saw a significant achievement by attracting $208 million in daily inflows. This surpassed the outflows from the Grayscale Bitcoin Trust (GBTC) for the first time since their respective launch days.

According to provisional data provided by Farside Investors, Fidelity's #FBTC experienced $208 million in inflows on Monday, while the GBTC recorded a daily outflow of $192 million. This marks the lowest daily outflows for GBTC outside of its re-launch, as indicated by data from BitMEX Research.

The recent outflows from #GBTC represent a nearly 25% decrease from $255 million on January 26 and a substantial 70% drop from the fund’s peak daily outflows of $641 million on January 22.

It is worth noting that this is the second-lowest outflow day for Grayscale’s fund, with only $95 million leaving on January 11, the day it transitioned into a spot Bitcoin exchange-traded fund (ETF).

Increased Competition in Spot Bitcoin ETFs Leads to Fee Reductions

In the competitive landscape of spot Bitcoin exchange-traded funds (ETFs), BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity Bitcoin ETF have emerged as key players. Both funds showcased significant daily volumes, with IBIT recording $460.9 million and FBTC pulling in $315.4 million. Together, they accounted for 78% of the combined volume generated by the nine new ETFs on the market.

Amidst the growing number of offerings, fund issuers are resorting to fee reductions to attract investors both in the U.S. and internationally. In a recent development, Invesco and Galaxy Asset Management announced a fee cut for their joint ETF, the Invesco Galaxy Bitcoin ETF (BTCO).

This fee adjustment brings BTCO in line with other major players such as BlackRock, Fidelity, Valkyrie, and VanEck. Notably, BTCO will have zero fees for the first six months or until it reaches $5 billion in assets, after which the new lower fee structure will take effect.

Together with all such information, Spot XRP ETF is also in trend, but its approval wouldn’t be as easy as Spot Bitcoin ETF.

Fee War Impact Shift of Traders from Europe to U.S. ETFs

Recent developments in the fee war within the exchange-traded fund (ETF) space in the United States may be influencing Europe's ETF market. Research conducted by CoinGabbar suggests that there is speculation about traders moving away from Europe-based products to their U.S. counterparts.

On January 23, Invesco took a significant step in the fee reduction trend by slashing fees on its Europe-based Bitcoin ETF. The expense ratio was lowered from 0.99% to 0.39%. Following suit, WisdomTree also joined the fee-cutting strategy, reducing fees from 0.95% to 0.35%.

Also Read: Alaska and Florida Regulators Took Action Against Binance US

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