4 months ago
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The high sponsor fee for Grayscale’s GBTC has pushed investors away to other more liquid and favorable similar Bitcoin products such as IBIT, and FBTC.
After four months of colossal cash inflows, BlackRock Inc (NYSE: BLK)-backed iShares Bitcoin Trust (NASDAQ: IBIT) surpassed Grayscale Investments’ Grayscale Bitcoin Trust (BTC) (NYSE Arca: GBTC) as the largest spot Bitcoin exchange-traded funds (ETFs). On Tuesday, the net spot Bitcoin ETFs flow was about $45 million of cash inflows.
Notably, the IBIT registered a total cash inflow of about $102.5 million while GBTC recorded a total cash outflow of around $105.2 million.
As a result, BlackRock’s IBIT has a net asset under management of around $19.68 billion compared to Grayscale’s GBTC with about $19.65 billion. Meanwhile, the Fidelity Investments-backed Fidelity Wise Origin Bitcoin Fund (Cboe BZX: FBTC) registered a total cash inflow of about $34.3 million. As of this report, the FBTC held around $11.1 billion in total net assets, thus the third largest spot Bitcoin ETFs in the market.
As Coinspeaker had previously reported, the United States-based spot Bitcoin ETFs have in the past two weeks registered significant cash inflows. More investors have been opting for the less expensive and highly liquid IBIT and FBTC rather than the GBTC.
Earlier this month, Grayscale CEO Michael Sonnenshein stepped down to pave the way for Peter Mintzberg, a former Goldman Sachs Group’s global head of strategy for asset and wealth management.
However, the fact that Grayscale’s GBTC has a sponsor fee of 1.5 percent compared to the rest with below 0.3 percent, market analysts believe the former will continue to bleed.
Meanwhile, Grayscale intends to counter its high fees with the Grayscale Bitcoin Mini Trust, which is yet to be approved by the U.S. Securities and Exchange Commission (SEC).
Market Impact on Bitcoin Price Action
The heightened demand for Bitcoin fueled by the spot BTC ETFs will fuel the bullish narrative in the coming quarters. The flagship coin has been retesting the fourth pre-halving breakout in the past few weeks. However, the resistance level around $72k has proved to be a hard nutshell for the buyers.
Consequently, Bitcoin price could easily rebound from the current levels to a new all-time high in the coming weeks. Moreover, Bitcoin price tends to move in the opposite direction of the crowd, with mild fear detected by traders.
The recent approval of spot Ethereum ETFs in the United States has significantly increased the crypto cash rotation in favor of the altcoin industry. Already, the Bitcoin dominance has confirmed a reversal pattern after forming lower lows on the weekly timeframe.
Additionally, the ETH/BTC pair has been on a rising trajectory after rebounding from a multi-year bottom last week. With billions of dollars expected to flow into the crypto industry in the coming months, the bullish sentiment will continue as anticipated.
