Jannat Ara

BlackRock and Fidelity Dominate Billion-Dollar Inflows in the Spot Bitcoin ETF Race

The recent approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) has witnessed significant inflows, with BlackRock and Fidelity leading the race. Fidelity’s Wise Origin Bitcoin Fund (FBTC) and BlackRock’s iShares Bitcoin Trust (IBIT) have collectively attracted inflows of $1.6 billion and $1.9 billion, making them the dominant issuers among the approved 10 asset managers. These two frontrunners, accounting for 70% of all spot BTC ETF inflows, have also rapidly reached $1 billion in assets under management (AUM), highlighting their prominence in the market.

Bitwise and ARK 21Shares, other approved issuers, recorded inflows exceeding $500 million, though they lag significantly behind BlackRock and Fidelity. The inflow data, according to Bloomberg, underscores the Wall Street giants’ influence, with both firms being among the largest financial institutions globally.

In contrast, Grayscale’s Bitcoin Trust (GBTC), the largest spot BTC ETF in terms of market capitalization and Bitcoin holdings, experienced substantial outflows, with nearly $4 billion leaving the trust within two weeks of SEC approval. Grayscale’s 1.5% ETF fee, the highest among issuers, attracted scrutiny, contributing to the significant outflows.

Grayscale CEO Michael Sonnenshein defended the ETF fee, emphasizing its position as the largest, most liquid, and oldest spot BTC ETF in the market. While Grayscale’s product holds over $20 billion in market capitalization and more than 500,000 Bitcoins in Coinbase custody, its outflows have generated selling pressure on BTC as tokens are liquidated to meet redemption demand.

The competitive landscape among spot BTC ETF issuers has led to varying fee structures, with some new entrants offering fees as low as 0.21%. Despite the fee scrutiny, the dominance of BlackRock and Fidelity signals their rapid success in the emerging spot Bitcoin ETF market.

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