Bitcoin ETFs Surge: BlackRock & Fidelity Lead The Pack

According to Bloomberg’s Senior ETF analyst Eric Balchunas, interest in market-leading spot Bitcoin ETFs exploded one month after launch. Balchunas posted a multi-tweet thread on X crunching the numbers behind the newly launched Bitcoin investment products. BlackRock and Fidelity’s ETFs took first and second place, respectively, attracting over $6 billion in funds since their launch on Jan 10.

That means the two have comfortably flipped all opposition from more stalwart ETFs like Invesco’s QQQ, which holds shares in the top non-financial publicly traded companies, the NASDAQ 100, a list that includes Apple, Google, Microsoft, and Tesla.

Balchunas also explained that money poured into the Bitcoin funds every single day of the month. This is important because the assets-under-management (AUM) metric can be misleading when a sole investor or a small group is responsible for all the inflows.

Bitcoin ETF Dynamics: Bitwise, Ark, Grayscale

Spot Bitcoin ETFs by Bitwise and Ark Invest also made the list, coming in 21st and 22nd, respectively. Grayscale’s GBTC, technically the largest ETF at $21 billion AUM, did not make the list because it had a decade-long headstart. GBTC started life as a Bitcoin fund in 2013, but it wasn’t until mid-2015 that shares began publicly trading under the ticker GBTC.

Since the US Securities and Exchange Commission approved the ETFs last month, Grayscale has been the only posting outflows: $6 billion. This is because, for years, the fund had been trading at a discount to its underlying asset due to its closed-end structure. There were a fixed number of shares, and no new ones could be created.

The closed-end structure evaporated along with the discount after GBTC converted to an ETF. Many holders exited their positions to pocket a tidy profit, including the estate of disgraced former crypto exchange FTX, which sold 22 million GBTC shares recently and may have raised a billion.

Thanks to Grayscale’s groundwork, Wall Street today embraced Bitcoin ETFs from BlackRock and Fidelity. Despite the SEC’s initial rejection in 2022, Grayscale’s persistence paid off when a federal court overturned the decision on Aug 29, 2023. This legal victory marked a crucial moment in the history of cryptocurrency and ETFs.

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Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.

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