BlackRock and Fidelity Lead the Race in SEC-Approved Bitcoin ETF

The U.S. Securities and Exchange Commission (SEC) has greenlighted several Bitcoin ETFs, with products from BlackRock and Fidelity outperforming others significantly, as Grayscale’s Bitcoin Trust (GBTC) experiences notable outflows.

BlackRock and Fidelity have emerged as leaders in the space, attracting $1.9 billion and $1.6 billion respectively in inflows for their spot Bitcoin ETFs. These two financial giants lead the pack among ten asset management firms sanctioned by the SEC to offer such products.

In contrast, crypto-focused Bitwise and the ARK 21Shares, supported by Cathie Wood, trail far behind, each managing to draw in over $500 million.

According to Bloomberg’s January 24 report, Fidelity’s Wise Origin Bitcoin Fund (FBTC) and BlackRock’s iShares Bitcoin Trust (IBIT) accounted for a significant 70% of all investments into spot Bitcoin exchange-traded products.

Remarkably, the ETFs from BlackRock and Fidelity are among the quickest to reach over $1 billion in assets under management (AUM), a feat likely aided by their formidable reputation on Wall Street.

However, Grayscale’s Bitcoin Trust (GBTC) has seen almost $4 billion in outflows since the SEC’s endorsement of spot Bitcoin ETFs. Despite these outflows, Grayscale’s fund remains the market’s largest, with over $20 billion in market capitalization and holding more than 500,000 Bitcoins.

Since the introduction of spot Bitcoin ETFs on January 11, Grayscale has transferred approximately 93,700 Bitcoins, valued at about $3.9 billion, to Coinbase Prime wallets, as reported by blockchain analytics firm LookOnChain. This massive withdrawal is believed to have exerted selling pressure on Bitcoin, as the liquidation of tokens meets redemption demands.

Grayscale’s Bitcoin Trust, with a 1.5% management fee — the highest among its peers — has been the subject of debate and analysis. Although this is a slight reduction from the previous 2% fee, Grayscale CEO Michael Sonnenshein defends the pricing, citing the fund’s size, liquidity, and tenure as the market’s foremost spot Bitcoin ETF. Sonnenshein notes that other, newer issuers have set lower fees, as low as 0.21%, to attract investors in a highly competitive market.

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