BlackRock’s Bitcoin ETF Surpasses Grayscale in Daily Trading Volumes

BlackRock’s spot Bitcoin ETF has surpassed Grayscale Investments’ similar ETF in trading volumes for the first time since the launch of U.S. spot Bitcoin funds on January 11.

Grayscale’s Bitcoin Trust ETF (GBTC) had previously led in trading volumes during the initial three weeks of trading for such products in the U.S.

BlackRock Now Ahead of Grayscale

In the initial 15 days of trading for the ten ETFs within the segment, GBTC was responsible for almost half of the trading volumes, amassing approximately $14.4 billion out of the total of $29.3 billion, per Bloomberg Intelligence.

However, while GBTC recorded trading volumes of about $292 million on Thursday, BlackRock’s iShares Bitcoin Trust (IBIT) experienced higher numbers, reaching $302 million.

Lead has been cut in half to $20 million. There’s 30+ minutes left in trading today for $GBTC to pass $IBIT in dollar Volume https://t.co/s8xPepvleZ pic.twitter.com/rXa2J2Zw26

— James Seyffart (@JSeyff) February 1, 2024

Despite GBTC’s substantial trading activity, it has faced net outflows amounting to $5.6 billion since its transition to the ETF. Observers in the industry note that many Grayscale investors were keen to divest from GBTC, which previously did not permit selling the trust shares at their net asset value.

Additionally, GBTC’s fee structure includes a 1.5% fee, markedly higher than that of its competitors, whose expense ratios vary between 0.19% and 0.39%.

John Hoffman, Grayscale’s managing director of sales and distribution, has mentioned that utilizing large capital markets ETFs in various investment strategies leads to the anticipation that GBTC’s varied investor base will persist in executing strategies affecting the fund’s inflows and outflows.

Grayscale Adjusts Bitcoin Holdings

The concern over Grayscale’s outflows prompted the trust to decrease its Bitcoin holdings by 5,086 BTC, valued at around $218 million. While outflows from Grayscale have been ongoing, BlackRock’s iShares Bitcoin Trust (IBIT) and the Fidelity Wise Origin Bitcoin Fund (FBTC) have seen substantial net inflows of about $2.8 billion and $2.5 billion, respectively, since their market debut.

Despite the significant outflows from Grayscale, the net inflows into the 10-spot Bitcoin ETFs surpassed $1 billion on Monday and reached nearly $1.5 billion by Wednesday.

In a competitive move, Invesco and Galaxy Asset Management announced a reduction in their fund’s fee from 0.39% to 0.25%, aligning them with most competitors.

Notably, the total trading volume for all active spot Bitcoin ETFs is approaching $27 billion, according to a post by Bloomberg Intelligence ETF analyst James Seyffart. The influx of funds into various ETFs has helped alleviate some of the bearish sentiment that previously led Bitcoin below the $40,000 mark.