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Fidelity’s spot Bitcoin exchange-traded fund (ETF) has overtaken Grayscale Bitcoin Trust by bringing in a significant $208 million daily inflows.
FBTC’s Daily Inflows Surge
Marking a crucial shift in the market, Fidelity's spot Bitcoin ETF, the FBTC, saw a remarkable surge in daily inflows, reaching a reported $208 million on January 29. This surge surpassed the outflows from the Grayscale Bitcoin Trust (GBTC) for the first time since its launch.
Crypto-focused VC firm Farside Investors provided provisional data, revealing a substantial $208 million influx into Fidelity's FBTC on Monday. In contrast, GBTC experienced daily outflows of $192 million on the same day, according to BitMEX Research data, marking its lowest since its re-launch.
Signs of Stabilization
Previously, on January 26, there was a nearly 25% reduction in GBTC outflows from $255 million, with a more significant 70% decline from the fund's peak daily outflows of $641 million on January 22. Notably, the day GBTC transitioned into a spot Bitcoin ETF, January 11, recorded the lowest outflows of $95 million, indicating a potential stabilization in investor sentiment.
This incident has resulted in hyper-vigilance among traders, who are keeping an eye out for any signs of slowing down for GBTC outflows, which could indicate investors are trying to seize an opportunity to exit underwater positions. However, JPMorgan analysts have reported that this could be as bad as it gets for GBTC-related outflows, which came as a major relief to Bitcoin investors.
Challenging GBTC Dominance
On January 29, new U.S. spot Bitcoin ETFs collectively achieved a volume of $994.1 million, nearly doubling the volume of GBTC, which recorded $570 million. BlackRock's iShares Bitcoin Trust (IBIT) and Fidelity's Wise Origin Bitcoin Fund (FBTC) took center stage with daily volumes of $460.9 million and $315.4 million, respectively. Together, these two funds accounted for 78% of the total volume generated by the nine new ETFs.
Data shared by Bloomberg ETF analyst James Seyffart highlights the growing competition, with the U.S. spot Bitcoin ETFs challenging the dominance of the well-established GBTC.
Fee Wars Intensify
The competitive market for spot Bitcoin ETFs has prompted fund issuers to slash fees in a bid to entice both U.S. and overseas investors. For instance, Invesco and Galaxy Asset Management recently announced a fee reduction for their joint ETF — Invesco Galaxy Bitcoin ETF (BTCO).
BTCO is the latest in a series of other major market players striking down fees, like BlackRock, Fidelity, Valkyrie, and VanEck. The fee war in the U.S. seems to have spilled over into Europe, as Invesco and WisdomTree slashed fees on their European-based Bitcoin ETFs.
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