Research Summary
The report provides an analysis of the Asset Under Management (AUM) held by US Spot Bitcoin Exchange Traded Funds (ETFs). It highlights the dominance of Grayscale Bitcoin Trust (GBTC) and discusses the impact of its conversion to a spot ETF. The report also mentions the market shares of other significant players like BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC).
Key Takeaways
Grayscale’s Dominance in Bitcoin ETFs
- Grayscale’s Massive Share: Grayscale Bitcoin Trust (GBTC) holds $25.3 billion in BTC, accounting for 93.4% of all BTC held in US spot Bitcoin ETFs. This dominance is attributed to GBTC’s early start in 2013, giving it a significant headstart over newer ETFs.
Other Significant Players in the Market
- BlackRock and Fidelity’s Market Share: BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) are the second and third largest spot BTC ETFs, respectively. IBIT has accumulated $698.1 million in BTC (2.6% market share), while FBTC holds $523.0 million in AUM (1.93% market share).
Bitcoin Holdings in ETFs
- Overall Bitcoin Holdings: Approximately 632k BTC is held in US spot ETFs, accounting for ~3.2% of all BTC in circulation. Grayscale holds the largest amount of BTC at ~591.1k, followed by BlackRock (IBIT) with 16.3k, and Fidelity (FBTC) with 12.2k.
Impact of GBTC’s Conversion to Spot ETF
- Outflows from GBTC: Since its conversion to a spot ETF on January 11, GBTC has seen outflows amounting to over $1.3 billion. This is due to investors selling their GBTC to enter other BTC ETFs or take profit now that the discount to its net asset value (NAV) has closed.
Management Fees and Investor Behavior
- High Management Fees: GBTC charges a high management fee of 1.5%, compared to other ETF providers who charge between 0.12% and 0.49%. This has led to large outflows from GBTC, as investors move their capital to providers with lower fees.
Actionable Insights
- Monitor GBTC’s Performance: Given the significant outflows from GBTC since its conversion to a spot ETF, it would be prudent to monitor its performance and the impact of its high management fees on investor behavior.
- Consider the Impact of Management Fees: The report highlights the influence of management fees on investor decisions. Stakeholders should consider this when evaluating investment options in Bitcoin ETFs.
- Assess the Market Share of Other Players: While Grayscale dominates the market, other players like BlackRock and Fidelity also hold significant shares. Assessing their strategies and performance could provide valuable insights into the Bitcoin ETF market.
