During the initial five days following the launch of Bitcoin exchange-traded funds (ETFs), the market witnessed the emergence of three funds, each surpassing the one billion dollar mark in assets under management (AUM).
This achievement was notable among the 11 funds that received regulatory clearance for stock market listings.
Despite experiencing substantial net outflows amounting to over $2.2 billion, the Grayscale Bitcoin Fund (GBTC) continues to dominate as the largest Bitcoin ETF, boasting an AUM of $23 billion.
In the runner-up position is the iShares Bitcoin Trust (IBIT) by BlackRock Inc (NYSE: BLK), holding $1.2 billion in AUM. This is closely followed by the Fidelity Investments’ Wise Origin Bitcoin Fund (FBTC), which has amassed $1 billion in AUM.
On the smaller end of the spectrum lies WisdomTree’s BTCW fund, with a modest $2.6 million in AUM. Additionally, funds managed by Franklin Templeton, Valkyrie, and VanEck each maintain less than $100 million in AUM.
Collectively, these newly introduced Bitcoin ETFs hold a combined total of $26.3 billion in Bitcoin, representing over 3% of the total circulating supply of Bitcoin globally.
Eric Balchunas, Bloomberg’s senior ETF analyst, shared these insights on X/Twitter, describing the outflows from GBTC as a “bloodbath,” despite its continued position as the market leader.
Grayscale has staunchly defended its 1.5% management fee, which is significantly higher than those of its competitors.
“In terms of crypto expertise, the asset manager’s specialization is key,” Salm mentioned in a Proactive interview. “Grayscale has the longest track record in this field.”
“We have successfully navigated through unique events in the crypto world. However, I’m not sure if other traditional asset managers are equipped to handle specific challenges like managing bitcoin blockchain memory pools or addressing forks and airdrops.
“These occurrences are rare in traditional finance, making them a critical consideration for investors choosing a Bitcoin ETF for their Bitcoin investments.”
Nevertheless, the noticeable outflows from GBTC indicate that investors are exploring other options, attracted by the lower fees of competitors like BlackRock and Fidelity.
BlackRock initially set its fee at 0.12%, with plans to increase it to 0.25% after 12 months.
Fidelity, on the other hand, is waiving fees until July 31, after which it will implement an annual management fee of 0.25%.
ProShares Enters the Short-Bitcoin Market
In response to the successful debut of these bitcoin ETFs, ProShares has expanded its derivatives portfolio with five new ETFs, including three that are short on bitcoin.
The ProShares UltraShort Bitcoin ETF aims to deliver twice the inverse of Bitcoin’s daily performance using futures-based contracts.
These funds do not hold Bitcoin directly, so their influence on the spot prices is minimal.
Despite the growing interest in bitcoin ETFs, the actual spot price of bitcoin has been underwhelming in its performance.
