A reflection of the trading activity in spot crypto exchange-traded funds (ETFs) shows that outflows witnessed by Grayscale Investments Bitcoin fund (GBTC) slowed for the fifth consecutive day. The slow Grayscale outflows coincided with Fidelity’s spot Bitcoin ETF realising a strong inflow since its unveiling on January 10.
The Fidelity spot Bitcoin ETF (FBTC) affirmed its ranking among the dominant duo of BlackRock and Grayscale Bitcoin ETFs. The FBTC reportedly realised $208 million in daily inflows on Monday, January 29.
Fidelity’s FBTC Inflows Outmatches GBTC Outflows
Fidelity’s FBTC saw the inflow outstrip the outflow suffered by Grayscale’s GBTC for the initial time since their approval on January 10 by the Gary Gensler-led Securities and Exchange Commission (SEC).
The provisional data conveyed by Farside Investors shows that Fidelity’s FBTC inflows of $208 outmatched the $192 outflows that GBTC suffered on Monday. BitMEX Research data indicates that GBTC witnessed the lowest daily outflow since relaunching.
The BitMEX Research statistics show that the GBTC outlaws sustained the downtrend momentum to realise a nearly 25% decline from the $255M reported on Friday, January 26. Also, Monday’s $192M represents a 70% decline from the peak outflow of $641 million realised on January 22.
Global Crypto Market Recovers as GBTC Outflows Slow
Monday’s figures represent the second-lowest that Grayscale has reported since the $95 million exited on January 11 when converting from trust to the spot Bitcoin ETF.
Grayscale has been in the spotlight as crypto traders became concerned about the exiting investors who were cashing out for profits realised from the once-underwater positions.
The slowing outflows relieve the pressure on crypto prices, leaving the global cryptocurrency market capitalisation 2.4% up in the past 24 hours to attain $1.74 trillion. The crypto trading volume clocked $63.9 billion, with Bitcoin dominance at 48.8% to $22.464 billion, while Ethereum accounted for 15.9% to $9.702 billion.
The recovery of the uptrend in crypto prices aligned with the forecast by JPMorgan analysts on Thursday, January 25, indicating that the GBTC outflows imposing downward price pressure on Bitcoin are broadly waning.
The review of January 29 figures indicates that nine of the spot Bitcoin ETFs realised an aggregated $994.1 million in trade volume. The Monday activity nearly doubled the $570 million realised by GBTC, as illustrated by data published by Bloomberg ETF analyst James Seyffart on the X platform.
The Ishares Bitcoin Trust (IBIT) by Larry Fink-led BlackRock realised $460.9 million daily volume, trailed by the Fidelity Wise Origin Bitcoin Fund (FBTC), which attained $315.4 million. The two pulled in a combined volume, translating to 78% of the daily activity by nine ETFs.
Heightened Fees War in Crowded Spot Bitcoin ETFs
The crowding witnessed in the spot Bitcoin ETFs market forces fund issuers to lower their fees to attract investors. Invesco and Galaxy Asset Management announced reduced fees to attract investors to the joint ETF – Invesco Galaxy Bitcoin ETF (BTCO). The joint statement by the two fund issuers revealed on Monday, January 29, that the expense ratio is dropping from 39 basis points to 25 basis points.
The fee drop for BTCO matches the levels Fidelity, VanECK, BlackRock and Valkyrie announced. Nevertheless, BTCO carries zero fees for the initial six months or when it realises $5 billion in assets for the lower fee to become effective.
CoinShares indicated that the fee war initiated by the US fund issuers is affecting the European-based ETFs. Market observers speculate that traders are ditching the Europe-based products as they embrace cheaper US-based spot Bitcoin ETFs.
On Monday, January 23, Invesco cut the fees for the European-based Bitcoin ETF from 99 to 39 basis points. Wisdom Tree replicated the trend by cutting costs from 0.95% to 0.35%.
CoinShares would, on Thursday, January 25, follow suit by reducing the fees on the flagship Bitcoin ETF to 0.35% from the previous 0.98%.
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