After three full days of trading since the approval of spot Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC), net inflows into these newly established funds have reached approximately 21,000 bitcoins, equivalent to $894 million at the current Bitcoin price of $42,600.
Among the newly approved ETFs, BlackRock’s iShares Bitcoin Trust (IBIT) stands out with the addition of 16,362 bitcoins, followed by Fidelity’s Wise Origin Bitcoin Fund (FBTC) with 12,112 bitcoins. However, Grayscale’s Bitcoin Trust (GBTC) experienced sizable outflows, losing around 25,000 bitcoins, thereby impacting the overall industry inflow.
Until the recent approval of Bitcoin ETFs, GBTC operated as a closed-end fund. It was converted into an ETF alongside the introduction of new products from firms like BlackRock. GBTC, with a prior management fee of 2%, held approximately 630,000 bitcoins.
The ETF version of GBTC now charges a reduced management fee of 1.5%, but this is still higher by at least 100 basis points compared to its new competitors. Furthermore, the conversion to an ETF eliminated the fund’s discount to net asset value (NAV), providing GBTC holders with reasons to sell, as reflected in the significant outflows.
Despite the substantial outflows from GBTC, the overall net inflows into ETFs have overshadowed the selling activity, contributing to the positive growth of these investment products.
Bitcoin’s price action has been relatively stable this week, hovering between $42,000 and $43,000. The cryptocurrency is down just over 1% in the past 24 hours, slightly underperforming the 0.6% drop in the CoinDesk 20 Index, which tracks the largest and most liquid cryptocurrencies globally.
As the Bitcoin ETFs continue to gain attention and attract substantial trading volumes, the debate surrounding their launch success or failure persists. Some view the ETFs as a triumph, noting $10 billion in trading volume within the first three days. On the contrary, skeptics point to the relatively modest price movement post-launch, the significant selling observed in GBTC, and net inflows that, while substantial, have not met some optimistic forecasts in the billions.
