Fidelity Leads Spot Bitcoin ETFs as Inflows Continue for Nine Consecutive Day

Crypto News– Fidelity Leads Spot Bitcoin ETFs: On February 7th, spot Bitcoin ETF products marked their ninth consecutive day of positive net inflows. According to data from Farside Investors, yesterday’s inflow stood as the highest for the month of February thus far, totaling a substantial $145 million. Interestingly, this coincided with Bitcoin’s 4% price surge to $44,500.

Fidelity Leads Spot Bitcoin ETFs as Inflows Continue for Nine Consecutive Day

Fidelity’s FBTC led the charge with an impressive $130 million in net inflows, marking its highest since January 31st. This brings Fidelity’s net inflows to an impressive $2.7 billion to date. In contrast, BlackRock’s IBIT observed a more modest net inflow of $56 million, but still maintained substantial overall net inflows at $3.3 billion.

However, GBTC experienced a minor net outflow of $81 million, exacerbating its total net outflows to -$6.2 billion, as per Farside Investors. Nonetheless, collective net inflows for Bitcoin ETF products reached a robust $1.7 billion, indicating sustained investor confidence in this sector. JPMorgan’s research report suggests that Blackrock (BLK) and Fidelity spot Bitcoin (BTC) exchange-traded funds (ETFs) appear to hold an advantage over Grayscale in certain liquidity metrics related to market breadth.

Despite a slowdown in outflows from Grayscale’s GBTC in the fourth week post-approval by the US SEC, the fund is expected to face stiff competition from the newly introduced ETFs. The primary contenders are Bitcoin ETFs offered by industry giants Blackrock and Fidelity.

This competition hinges on Grayscale making significant fee reductions. Otherwise, GBTC will likely continue to face challenges due to high management fees. Currently, Grayscale imposes the highest fees among spot Bitcoin ETF issuers. Even though it reduced its management fee from 2% to 1.5% during its transition to a spot Bitcoin ETF, it remains notably pricier compared to its competitors. According to JPMorgan analysts led by Nikolaos Panigirtzoglou:

“Beyond fees, Blackrock and Fidelity ETFs are already enjoying an advantage over GBTC in terms of two liquidity metrics.”

JPMorgan employs two metrics to assess market breadth and liquidity in ETFs. Firstly, the Hui-Heubel ratio acts as a proxy for market breadth, with GBTC exhibiting a value roughly four times higher than that of Blackrock and Fidelity ETFs. This suggests that the latter ETFs demonstrate significantly more market breadth compared to GBTC.

Secondly, the analysis considers the “average absolute deviation” of ETF closing prices from net asset value (NAV). Recent data indicates that the ETF price deviation from NAV for Fidelity and Blackrock spot Bitcoin ETFs has approached levels seen in the GLD Gold ETF, indicating a notable improvement in liquidity. Conversely, deviations for the GBTC ETF remain high, signaling lower liquidity.