Fidelity’s Spot Bitcoin ETF $208M Inflow Outpaces Grayscale Outflows

According to provisional data from Farside Investors, Fidelity’s spot Bitcoin exchange-traded fund (ETF), FBTC, attracted a staggering $208 million in daily inflows on Jan. 29. This marks a significant achievement for the fund as it surpassed the outflows from the Grayscale Bitcoin Trust (GBTC) for the first time since its launch.

In contrast, GBTC experienced outflows of $192 million on the same day, marking its lowest daily outflows, except for its re-launch, according to data from BitMEX Research. The recent outflows from GBTC show a 25% decrease from $255 million on Jan. 26 and a substantial 70% drop from the fund’s peak daily outflows of $641 million on Jan. 22.

JPMorgan analysts commented on the situation on Jan 25., stating that the outflows from GBTC have exerted downward pressure on Bitcoin’s price. However, they suggest that this pressure might be waning a bit.

On Jan. 29, data disclosed that nine new US spot Bitcoin ETFs collectively amassed a remarkable volume of $994.1 million. This impressive figure is almost double that of GBTC, which recorded $570 million in volume during the same period. 

And @Grayscale's $GBTC maintains its liquidity crown — trading $570 million and ~$110 million more than second place $IBIT today https://t.co/WIAWKwDnqY pic.twitter.com/ma0CE5szLa

— James Seyffart (@JSeyff) January 29, 2024

Among these new ETFs, Fidelity Wise Origin Bitcoin Fund (FBTC) and BlackRock’s iShares Bitcoin Trust (IBIT) emerged as significant players, with daily volumes of $315.4 million and $460.9 million, respectively. Moreover, these two funds comprised 78% of the total volume generated by the nine new ETFs.

Increased Competition Among Spot Bitcoin ETFs Leads to Fee Reductions

The competition in the spot BTC ETF market has led to a ‘fee war,’ with fund issuers reducing fees to attract investors in the US and internationally. On Jan. 29, Galaxy Asset Management and Invesco announced a fee reduction for their joint ETF, the Invesco Galaxy Bitcoin ETF (BTCO), from 0.39% to 0.25%.

This move aligns BTCO’s fees with other major players in the market, including Valkyrie, BlackRock, Fidelity, and VanEck. BTCO has implemented a unique offer of zero fees for the first six months or until it accumulates $5 billion in assets, after which the new lower fee will go into effect.

We have @InvescoUS & @galaxyhq cutting the long term fee on their #Bitcoin ETF from 39 bps to 25 bps.

(Yes they have the fee waiver to 0% for first 6 months or $5 billion in assets). Story from @emily_graffeo & @kgreifeld pic.twitter.com/Erk2NU9kVF

— James Seyffart (@JSeyff) January 29, 2024

Moreover, Invesco slashed fees on its Europe-based Bitcoin ETF from 0.99% to 0.39% on Jan. 23, and WisdomTree followed suit by reducing fees from 0.95% to 0.35%. CoinShares also joined the trend on Jan. 25 by cutting fees on its flagship Bitcoin ETF from 0.98% to 0.35%.