Liquidity Advantage: BlackRock and Fidelity Look More Advantageous Than Grayscale

Crypto News – On Wednesday, JPMorgan released a research paper. According to the report, in terms of specific liquidity indicators related to market breadth, spot bitcoin ETFs from BlackRock and Fidelity outperform Grayscale.

Liquidity Advantage: BlackRock and Fidelity Look More Advantageous Than Grayscale

Furthermore, according to the report, withdrawals from Grayscale’s GBTC appear to have decreased in the fourth week after the US Securities and Exchange Commission approved it. In the event that the fund does not significantly reduce its fees, it is still anticipated to fall short of recently established ETFs, especially those offered by BlackRock and Fidelity.

Grayscale is the spot Bitcoin ETF issuer with the highest costs. As part of its transition to a spot bitcoin ETF, it lowered its 2% management fee to 1.5%, but it is still far more costly than competing products.

Which Two Liquidity Measures Provide Advantage?

An additional reason beyond fees is that the BlackRock and Fidelity ETFs are already commanding an advantage vs GBTC in terms of two liquidity metrics,

analysts led by Nikolaos Panigirtzoglou

The first uses the Hui-Heubel ratio as the bank’s approximation of market breadth. Compared to BlackRock and Fidelity ETFs, GBTC has a value that is around four times higher, suggesting that they have a substantially wider market than GBTC. According to the research, the second indicator is based on the “average absolute deviation” of ETF closing prices from net asset value (NAV).

ETF price deviation from NAV of the Fidelity and BlackRock spot bitcoin ETFs approached that of the GLD Gold ETF, implying a significant improvement in liquidity, while the deviations for the GBTC ETF have remained high implying lower liquidity,

the report