Following three full days of trading, the net inflows into recently approved spot bitcoin exchange-traded funds (ETFs) seem to be around 21,000 bitcoin (BTC), equivalent to $894 million at the current price of $42,600. Leading the pack in attracting new investments is BlackRock’s iShares Bitcoin Trust (IBIT), accumulating 16,362 bitcoin, followed by Fidelity’s Wise Origin Bitcoin Fund (FBTC) with 12,112 bitcoin. Notably, substantial withdrawals from Grayscale’s Bitcoin Trust (GBTC), losing around 25,000 bitcoin, impacted the overall industry inflow.
Until the recent approval of bitcoin ETFs by the U.S. Securities and Exchange Commission, GBTC operated as a closed-end fund and underwent conversion into an ETF alongside other newly introduced products, including those from BlackRock. Prior to the ETF approvals, GBTC charged a 2% management fee and held approximately 630,000 bitcoin. The ETF version of GBTC now charges a reduced management fee of 1.5%, albeit still at least 100 basis points higher than its competitors. The conversion also eliminated the fund’s previous discount to net asset value (NAV), prompting some GBTC holders to sell, as suggested by early returns.
Despite the selling activity in GBTC, the influx of new investments into the ETFs has outweighed the outflows, resulting in positive net inflows overall. Bitcoin’s price action has been relatively subdued this week, hovering around the $42,000-$43,000 range. Currently, it has experienced a slight decline of just over 1% in the past 24 hours, slightly underperforming the 0.6% drop in the CoinDesk 20 Index, tracking the largest and most liquid cryptocurrencies globally.
The discussion surrounding the success or failure of the bitcoin ETF launch has emerged. While some argue that the ETFs have been a success in the broader ETF market, citing $10 billion in trading volume for the new funds in the first three days, others point to the modest price performance since launch (with bitcoin down nearly 10%). The considerable selling activity in GBTC and initial net inflows, though significant, have fallen short of some optimistic forecasts in the billions. The ultimate judgment on the success of the ETFs may hinge on future bitcoin price movements, with opinions divided based on market dynamics and performance.”