How the Bitcoin ETF has performed in its first five months

adminJune 6, 2024

Spot Bitcoin ETF is 5 months away from launch. ETFs, especially newly launched ETFs, have achieved unprecedented levels of success, breaking records and capturing public attention. In particular, BlackRock’s IBIT boasted a competitive 0.25% fee, but was incorporated into the world’s largest asset management company, attracting investors, and establishing itself as a leader in terms of inflow and trading volume.

However, for some time, IBIT has not been the largest spot Bitcoin ETF by assets under management (AUM). Its main competitor was Grayscale’s GBTC, which made huge strides in terms of fund size compared to its competitors because it converted trusts into funds, unlike other ETFs that started from scratch.

Grayscale held approximately 619,220 BTC when the spot ETF began trading, valued at over $28.5 billion at the time. Meanwhile, IBIT started with a seed amount of $10 million and is using the inflows to grow its AUM.

Unlike all other funds, Grayscale faced massive outflows upon launch as it was finally granted a redemption mechanism that investors had avoided prior to the conversion.

So the general trend that has emerged is that GBTC’s AUM is decreasing while other ETFs are increasing, which could put pressure on GBTC’s initial market dominance. On May 29, IBIT took the top spot, surpassing Grayscale, the spot Bitcoin ETF with the most assets.

The change comes amid overall strength in spot Bitcoin ETFs, which have tracked net positive flows across the fund since May 13, with the cryptocurrency market rebounding slightly after a strong rally in March. I have done it. As Grayscale’s outflows became more modest, inflows to other funds often balanced out the results.

Many of the same issuers are adjusting their S-1s for spot Ethereum ETFs after 19b-4 was approved last month. Once again, Grayscale will start with a significant amount of ETH, worth about $11 billion at current prices.

A similar mechanism is likely to emerge in the ether space as new competitors grow while early ETHE holders redeem themselves. Additionally, as long as its fees are consistent with other fees, BlackRock is likely to be the issuer that shows the most significant early-stage growth.

Now we have a benchmark for how long it took Grayscale to fall from the largest AUM on the Bitcoin side, and time will tell whether it is longer or shorter on the Ethereum side.

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adminJune 6, 2024