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Fidelity’s Bitcoin ETF Outpaces Grayscale’s GBTC in Daily Inflows, Signaling Shifting Investor Sentiment

Fidelity’s Bitcoin exchange-traded fund (ETF), known as FBTC, experienced a significant surge in daily inflows on January 29, attracting a total of $208 million.

This impressive figure marked a milestone as FBTC surpassed the daily outflows from Grayscale Bitcoin Trust (GBTC) for the first time since its launch.

According to data from Farside Investors, GBTC recorded outflows of $192 million on the same day, marking its lowest daily outflows since its re-launch.

This marked a notable shift in investor sentiment towards these two prominent Bitcoin investment vehicles.

The decline in GBTC outflows has been closely watched by crypto traders, who are eager to assess whether investors are cashing out of positions that had been in the red.

On January 25, JPMorgan analysts observed that GBTC outflows had previously exerted downward pressure on Bitcoin’s price but anticipated that this trend was likely to diminish in the near future.

On the same day, January 29, data revealed that nine newly launched U.S. spot Bitcoin ETFs collectively accumulated an impressive $994.1 million in trading volume.

This nearly doubled the trading volume of GBTC, which reached $570 million. Among these ETFs, BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s FBTC emerged as significant players, with daily volumes of $460.9 million and $315.4 million, respectively.

Together, they accounted for 78% of the total trading volume generated by the nine newly introduced ETFs.

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The competitive landscape in the spot Bitcoin ETF market has prompted issuers to reduce fees in order to attract investors both in the United States and globally.

Invesco and Galaxy Asset Management recently announced a fee reduction for their joint ETF, Invesco Galaxy Bitcoin ETF (BTCO), lowering the eventual expense ratio from 0.39% to 0.25%.

Notably, BTCO will have zero fees for the initial six months or until its assets reach $5 billion, at which point the reduced fee structure will take effect.

This fee war in the U.S. may have also influenced the European ETF market, where traders have reportedly been shifting their investments to American products.

Several European-based ETF providers, including Invesco and WisdomTree, have reduced their fees in response to this competitive environment.

CoinShares followed suit, further slashing fees on its flagship Bitcoin ETF, making the market more appealing to cost-conscious investors.

Overall, the surging interest in spot Bitcoin ETFs and the accompanying fee reductions demonstrate the dynamic nature of the cryptocurrency investment landscape, with investors seeking cost-effective and accessible avenues to gain exposure to Bitcoin.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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