Five Bitcoin ETF Issuers Realize $1B Assets Under Management
A review of the newly approved spot Bitcoin exchange-traded funds (ETFs) shows a contrasting outcome where five constitute the billion-dollar club, as others lag considerably.
The latest observation comes when the spot Bitcoin funds have clocked $4.6 billion in net inflows in their aggregate value. However, only five of the newly approved spot Bitcoin ETFs have attained $1B in assets under management (AUM). The rest of the group lags behind the leaders considerably.
Bitwise Joins Billion-Dollar Club
Bitwise Asset Management saw its Bitcoin ETF (BITB) join the billion-dollar club, with its asset testing the mark to become the fifth issuer in the US.
The billion-dollar club still has Grayscale Investments’ Bitcoin Trust ETF (GBTC) commanding a comfortable lead. The GBTC has $23.8 billion AUM, though a decline from $28 billion before converting the trust into spot Bitcoin ETF.
In recent weeks, Grayscale has suffered a $6.8 billion outflow since the January 11 conversion into trust, as per BitMEX Research data. Further scrutiny into the nine US spot Bitcoin ETFs shows they have realized over $11.4 billion in net inflows. The activity places the total net flows at $4.6 billion.
The market analysts report that BlackRock’s iShares ETF (IBIT) is the fastest-growing ETF alongside Fidelity Investments’ (Wise Origin Bitcoin Fund (GBTC). By press time, BlackRock had $6 billion AUM, while Fidelity had $4.3 billion.
Cathie Wood’s Ark 21Shares Bitcoin ETF (ARKB) is within the dollar club having realized $1.4 billion in assets, slightly above the Bitwise BITB with $1.1 billion.
BlackRock and Fidelity Realize Impressive Inflows
ETF store chief Nate Geraci noted that BlackRock and Fidelity separated from the other issuers, given their impressive inflows. ARKB and BITB are leveraging their chops in the race to become leading players in the spot ETF segment.
VanEck, in its recent report, indicated that scale is critical amid the intensified fee war witnessed in the spot Bitcoin ETF segment. The firm plans to reduce the management fees from 0.25% to 0.20% by Wednesday, Thursday, 21.
Geraci indicated that success is replicated within the ETF space, as witnessed by five of the ten quickly accumulating assets. The five will make things challenging for the rest of ETF issuers who lag.
Zack Investment Research director of ETF research Neena Mishra indicated that more Bitcoin ETF issuers will accumulate significant assets in unprecedented growth.
Mishra admitted that the success realized by the five ETFs surpasses the expectations. She acknowledged that it would not be surprising if another of the issuers that lag realized the $1 billion level.
Geraci considers the possibility of another ETF issuer realizing $1 billion would take longer. A review of the ETF segment shows Invesco at $315 million while VanEck is at $190 million. Further review of the BitMEX Research data shows Valkyrie Investments at $152 million.
Franklin Templeton and Wisdom Tree Lag in Bitcoin ETF Race
The BitMEX Research shows that Franklin Templeton joins Wisdom Tree, where each had $96 million and $26 million AUM, respectively.
Mishra observed that the ETFs should realize a minimum of $50 million in AUM to realize viability. The researcher noted that funds issued by the smaller firms would struggle with the higher operating costs. Such are likely to face liquidation or are let to continue trading through unprofitable to run.
Crypto executives and market observers observed that significant wealth management embraced the spot Bitcoin ETFs. Such is yet to be allocated to the newly approved spot ETFs.
Bitwise head of investment executive Matt Hougan illustrated during the exchange ETF conference held in Florida that a secondary acceleration of inflows is bound in a few months. The executive anticipates more funds to flow into more platforms.
Geraci indicates that all issuers seek to sustain their product in the competitive segment. However, poor economics would likely force several firms to exit the race.
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