BlackRock’s Bitcoin ETF outpaced the Grayscale Bitcoin Trust (GBTC) in daily trading volume for the first time on Thursday, underscoring the declining influence of the traditional fund in the Bitcoin (BTC) market.
The iShares Bitcoin Trust (IBIT) facilitated $300 million in trades, while GBTC managed $290 million in trading volume, as reported by Bloomberg Intelligence. On the asset inflows and outflows front, data from BitMEX Research reveals that BlackRock saw a net asset increase of $163.9 million, while Grayscale’s fund experienced an outflow of $182 million worth of BTC.
Bloomberg ETF analyst James Seyffart tweeted, “Total trading today was somewhat subdued at $924 million – marking the first day below $1 billion in dollar volume for the group since its launch.”
Is BlackRock’s Bitcoin ETF Beating Grayscale?
Seyffart suggests that it will be challenging to identify the true “trading vehicle of choice” in the Bitcoin market until a day characterized by significant price volatility or trading volume emerges. Since the market’s selloff following the introduction of several Bitcoin spot ETFs on January 11, such a day has yet to materialize.
Nonetheless, a discernible trend favoring BlackRock is beginning to emerge. On multiple trading days this week, BlackRock has started with the lead in trading volume before narrowly being overtaken by Grayscale later on.
Furthermore, BlackRock has already garnered $3 billion in net inflows to its Bitcoin ETF within just three weeks. In contrast, Grayscale’s ETF has seen nearly $6 billion in outflows during the same period, without a single day of net inflows.
The initial outflows from Grayscale were primarily triggered by factors such as the FTX bankruptcy estate’s sale of GBTC, profit-taking by sell-the-news traders, and individuals capitalizing on the restored GBTC discount relative to its underlying Bitcoin holdings.
GBTC Fees Higher Than Competitors
Investors have a strong incentive to continue divesting from GBTC for another compelling reason. The fund still imposes a management fee of 1.5%, whereas most competing products with identical offerings charge less than 0.25% annually, including BlackRock’s ETF.
In the event that this substantial fund loses its liquidity advantage to BlackRock, it will essentially offer nothing to its customers that competitors cannot.
Nevertheless, Grayscale CEO Michael Sonnenshein has expressed confidence in the fund’s decision to maintain its relatively higher fee structure. He stated last month, “I think from our perspective, it may, at times, raise questions about their long-term commitment to the asset class,” referring to other funds with lower fees.
Apart from Grayscale and BlackRock, Fidelity manages the next-largest amount of Bitcoin, with approximately $2.4 billion under management.