Fidelity’s Bitcoin ETF Gains $208 Million in Daily Inflows
Fidelity’s spot Bitcoin exchange-traded fund (ETF) achieved a significant milestone on January 29th, attracting $208 million in daily inflows. This marked the first time that Fidelity’s ETF has surpassed outflows from the Grayscale Bitcoin Trust (GBTC) since their respective launch days.
According to data provided by Farside Investors, Fidelity’s FBTC recorded $208 million in inflows on January 29th, while GBTC experienced outflows of $192 million, as per BitMEX Research data. These figures depict the lowest daily outflows for GBTC outside of its relaunch, indicating a nearly 25% drop from $255 million on January 26th, and a staggering 70% drop from its peak daily outflows of $641 million on January 22nd.
The decline in GBTC outflows has captured the attention of crypto traders eagerly assessing the market for signs of investors cashing out their once-underwater positions. JPMorgan analysts have previously highlighted the downward impact of GBTC outflows on Bitcoin’s price. However, they believe that this trend is likely diminishing, stating that it “should be largely behind us.”
On January 29th, the nine new spot Bitcoin ETFs launched in the United States collectively recorded an impressive trading volume of $994.1 million. This figure nearly doubles GBTC’s trading volume, which amounted to $570 million on the same day. These statistics were shared by Bloomberg ETF analyst James Seyffart.
To attract investors in the highly competitive market for spot Bitcoin ETFs, issuers have resorted to cutting fees both in the United States and abroad. Invesco and Galaxy Asset Management have recently announced fee reductions on their joint ETF, Invesco Galaxy Bitcoin ETF (BTCO). The expense ratio of this ETF will decrease from 0.39% to 0.25%, placing it on par with the fee structures of BlackRock, Fidelity, Valkyrie, and VanEck. An interesting aspect of BTCO is that it will be fee-free for the first six months or until it reaches $5 billion in assets.
Speculation suggests that the fee war in the United States has influenced the decision of traders to shift their investments from Europe-based products to the U.S. market. CoinShares research indicates that this trend has affected Europe’s ETFs, resulting in potential outflows. In response to this market dynamic, Invesco and WisdomTree have significantly reduced their fees on European Bitcoin ETFs. CoinShares has also followed suit by cutting fees on its flagship Bitcoin ETF. These fee reductions aim to attract traders and investors back into the European market.
Analyst comment
Positive news: Fidelity’s Bitcoin ETF gained $208 million in daily inflows, surpassing outflows from the Grayscale Bitcoin Trust.
Market analysis: The positive inflows for Fidelity’s ETF indicate investor confidence and suggest improved market conditions. U.S. spot Bitcoin ETFs are seeing robust trading volume, and competition has led to fee reductions. European ETFs are adapting to the fee war in the U.S. to attract investors. The market is expected to remain competitive with potential growth opportunities.
