On the fifth day of bitcoin exchange-traded funds, the market gave to us, three funds with more than one billion dollars in assets under management out of the 11 that won regulatory approval for a stock market listing.
Despite being slapped with more than $2.2 billion in net outflows, the Grayscale Bitcoin Fund (GBTC) remains the largest bitcoin ETF on the market by a significant margin with $23 billion in AUM.
In second place is BlackRock Inc (NYSE:NYSE:BLK)’s iShares Bitcoin trust (IBIT) with $1.2 billion in AUM, followed by Fidelity Investments’ $1 billion Wise Origin Bitcoin Fund (FBTC).
WisdomTree’s BTCW fund is the minnow of the bunch with just $2.6 million in AUM, while funds managed by Franklin Templeton and, Valkyrie and VanEck all hold less than $100 million.
Put together, this new class of ETFs hold $26.3 billion in bitcoin between them, which is more than 3% of bitcoin’s global circulating supply.
Sharing the data on X/Twitter, Bloomberg’s senior ETF analyst Eric Balchunas called GBTC’s outflows a “bloodbath”, even though it remains the leader.
LATEST: Day Five (but its felt like months hasn't it?) is in books TOTAL ROLLING NET FLOWS at +$1.2b, down a bit after $GBTC's whopper -$582m edged out the Nine's +$447m. $GBTC bloodbath up to -$2.2b vs the Nine's +$3.3b w/ $6.6b in volume. $FBTC joins $IBIT in the Billy Club. pic.twitter.com/q6pFIrPTFV— Eric Balchunas (@EricBalchunas) January 19, 2024
Grayscale has vigorously defended its 1.5% management fee, which is several orders of magnitude more expensive than any of its competitors.
“I think factors like the asset manager's crypto specialisation are crucial,” said Salm in an interview with Proactive. “Grayscale has been doing this longer than anybody else.”
“We've navigated many of the more idiosyncratic events that have occurred in the crypto space. But I don't know if every other traditional asset manager can handle things like dealing with memory pools in the bitcoin blockchain, or forks and airdrops.
“These are events that don't typically occur in traditional finance. Thus, this becomes another important variable for any investor when deciding on which bitcoin ETF to use if they want to invest in Bitcoin.”
Yet the outflows prove that investors are pulling their money out of GBTC and shopping around, enticed by the negligible fees offered by BlackRock and Fidelity.
BlackRock kicked things off with a 0.12% fee before an increase to 0.25% scheduled in 12 months.
Fidelity, meanwhile, is not charging anything until 31 July, when an annual management fee of 0.25% will be applied.
ProShares go short
Following the high-profile launch of these bitcoin ETFs, the ProShares investment group has sought to expand its derivatives offering with five new ETFs, including three short-bitcoin funds.
ProShares’ UltraShort Bitcoin ETF intends to offer two times the inverse of bitcoin’s daily performance through futures-based contracts.
These funds do not directly hold bitcoin, thus their impact on spot prices is largely inconsequential.
Despite the substantial interest in bitcoin ETFs, bitcoin’s underlying spot price has underperformed.
At the time of writing, the BTC/USD was swapping for $40,945, marking an 11% week-on-week decline.