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The JPMorgan analysts highlighted BlackRock and Fidelity Investment’s spot Bitcoin ETFs as emerging competitors to GBTC.
In a recent market report, JPMorgan analysts have indicated that the majority of profit-taking from Grayscale’s Bitcoin Trust (GBTC) may now be behind us. The insights provided by the analysts suggest that investors have likely completed much of the profit-taking from the GBTC, which could potentially alleviate downward pressure on Bitcoin prices.
GBTC’s Profit-Taking and Impact on Bitcoin
The analysis comes amid a record-setting 9th day of daily net outflows from United States spot Bitcoin Exchange-Traded Funds (ETFs). A complementary report from BitMEX Research noted that GBTC has recorded only $80 million net outflow for day 10.
JPMorgan’s market strategy managing director, Nikolaos Panigirtzoglou, highlighted that “GBTC profit taking has largely happened already. This would imply that most of the downward pressure on Bitcoin from that channel should be largely behind us.”
The JPMorgan analysts pointed to the $4.3 billion outflows from the fund since its conversion to an ETF on January 11, attributing it to “profit-taking on previous GBTC investments.” This, they suggest, is a factor contributing to Bitcoin’s nearly 20% price drop, pushing it below the $40,000 mark since the introduction of the multiple Bitcoin ETF products.
As of the time of writing, Bitcoin (BTC) is trading at $40,621, demonstrating an increase of 1.36% in the past 24 hours. Additionally, the market capitalization has increased to $795 billion, while 24-hour trading volume stands at $19.4 billion.
Other ETFs except Grayscale had a total net inflow of $314 million, BlackRock’s spot Bitcoin ETF (IBIT) had a single-day net inflow of $170 million, and Fidelity spot Bitcoin ETF (FBTC) had an inflow of $101 million.
On January 25 alone, Grayscale Bitcoin Trust (GBTC), experienced a net outflow of $394 million, accompanied by a single-day trading volume of $502 million. Although net outflows have slowed slightly over the past three trading days ($394 million on January 25, $429 million on January 24, $515 million on January 23, and $640 million on January 22), the cumulative total has reached $4.79 billion.
Just GBTC and Bitwise out so far for day 10
Another very solid day from Bitwise at +$20m
GBTC has had $4.8 billion of outflows in the 10 days pic.twitter.com/Ya1CFHrJlw
— BitMEX Research (@BitMEXResearch) January 25, 2024
Despite these outflows, Grayscale still holds more than $20 billion in net assets, showcasing the resilience and presence of institutional investors in the crypto market.
Emerging Competitors to GBTC
The JPMorgan analysts highlighted BlackRock Inc (NYSE: BLK) and Fidelity Investment’s spot Bitcoin ETFs as emerging competitors to GBTC. Both investment giants have amassed substantial assets under management, with BlackRock holding $1.9 billion and Fidelity closely following with $1.8 billion.
Markedly, inflows to BlackRock’s spot Bitcoin ETF on January 24 were the lowest since its launch, recording only $66.2 million on the day. However, BlackRock increased its Bitcoin holdings by 1,663 BTC, bringing the total to nearly 45,700 BTC.
Fidelity’s ETF, on the other hand, added 3,170 BTC on January 24, reaching a total of 41,319 BTC. Despite the slowing inflows for BlackRock, both companies remain formidable players in the market, contributing to the ongoing evolution of crypto investment options.
The competition to Grayscale Investments might intensify moving forward, especially if the firm does not change its bogus fee of 1.5%. This fee is a dis-incentive that might make investors explore alternative chains despite the legacy of the firm as one of the largest Bitcoin funds in the world.
