The Grayscale Bitcoin Trust (GBTC) was overtaken in daily trading volume by BlackRock’s Bitcoin ETF for the first time on Thursday, highlighting the legacy fund’s shrinking dominance over the Bitcoin (BTC) market.
The iShares Bitcoin Trust (IBIT) processed $300 million in trades, versus $290 million from GBTC, according to Bloomberg Intelligence. On flows, data from BitMEX Research shows that BlackRock increased its net assets by $163.9 million, while $182 million worth of BTC left Grayscale’s fund.
Bitcoin ETF Flow – Day 15
All data out. Net flow of +$38.5m for day 15. Relatively quiet day it seems pic.twitter.com/L478MuK9v1
— BitMEX Research (@BitMEXResearch) February 2, 2024
“Total trading today was kind of a dud though at $924 million–first day below $1 billion in dollar volume for the group since launch,” Bloomberg ETF analyst James Seyffart tweeted.
Is BlackRock’s Bitcoin ETF Beating Grayscale?
According to Seyffart, it will be difficult to determine what the market’s Bitcoin “trading vehicle of choice” truly is until a day of noticeably high price volatility or volume comes. Since the selloff that followed the launch of several Bitcoin spot ETFs on January 11, there’s been no such day to speak of.
A clear trend towards Blackrock is taking shape, however. Multiple trading days this week began with BlackRock in the lead on volume before being narrowly surpassed by Graysclae later on.
Additionally, BlackRock has already received $3 billion in net inflows to its Bitcoin ETF within three weeks. Grayscale’s ETF has lost nearly $6 billion over that same period, with not a single day of net inflows.
Much of Grayscale’s early outflows were driven by the FTX bankruptcy estate selling GBTC, sell-the-news traders, and those cashing out on the now-restored GBTC discount against its underlying Bitcoin holdings.
GBTC Fees Higher Than Competitors
Investors have another strong reason to continue offloading GBTC, however. The fund still charges a management fee of 1.5%, while most rivals offering an identical product are charging under 0.25% per year, including BlackRock.
As such, if the massive fund loses its liquidity advantage against BlackRock, it will offer nothing to customers that rivals can’t.
Regardless, Grayscale CEO Michael Sonnhenshein has expressed confidence that the fund’s decision to keep its fee relatively elevated was the right one.
“I think from our standpoint, it may at times call into question their long-term commitment to the asset class,” he said last month regarding other funds’ low fees.
Next to Grayscale and BlackRock, Fidelity carries the next largest amount of Bitcoin under management at roughly $2.4 billion.
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