On Thursday, BlackRock's Bitcoin ETF, known as IBIT, surpassed the $1 billion mark, becoming the first among the recently launched Bitcoin ETFs to exceed this milestone. Investors poured $371 million into BlackRock's ETF on Wednesday alone. Following closely, Fidelity Investments' Bitcoin ETF, FBTC, received $358 million on the same day, setting a new record for the fund since its launch a week earlier, reaching a total of approximately $880 million.
The U.S. Securities and Exchange Commission (SEC) approved the first batch of spot Bitcoin ETFs last week, with 11 Bitcoin ETFs hitting the market, including nine new launches. BlackRock and Fidelity emerged as the biggest winners among the new ETFs, collectively attracting 68% of the inflows.
Analysts were not surprised by BlackRock's success, citing its abundant resources and emphasis on the asset class. The significant inflows into BlackRock and Fidelity's ETFs were largely due to outflows from Grayscale Investments' Bitcoin ETF, GBTC. Grayscale's Bitcoin trust, established in 2013, had managed assets of over $28 billion when it converted to an ETF, but experienced outflows of about $1.6 billion as other issuers' Bitcoin ETFs were approved.
The management fee of Grayscale's Bitcoin ETF is notably high at 1.5%, compared to much lower fees by BlackRock and Fidelity. Despite this, the two giants do not have the lowest fees in the market. The lowest fee, at 0.19%, is charged by Franklin Templeton, but its Bitcoin ETF attracted less than 2% of the inflows. Industry insiders believe BlackRock and Fidelity's institutional and retail distribution networks will likely secure them more market share in the future.
Rachel Aguirre, head of U.S. iShares products at BlackRock, commented that their product has attracted retail investors from the start and the company is also focusing on new investors unfamiliar with the asset class. She noted the diverse sources of capital inflows and excitement about attracting new investors to this asset category.
Since their launch, Bitcoin ETFs have experienced a "sell-the-news" trend. Last Thursday, Bitcoin briefly surged past $49,000, reaching a new high since December 2021, but quickly retreated below $46,000. Looking at BlackRock's IBIT, the ETF has ended each trading day lower since the launch of Bitcoin ETFs. On Thursday, Bitcoin dipped to around $40,800.
A prominent social media influencer on X platform (formerly Twitter) with over 900,000 followers revealed opening a $300,000 short position on Thursday, stating it was the only way to eventually boost Bitcoin's price.
Market participants suggest that the hype around Bitcoin ETFs is waning, with traders likely shifting their focus elsewhere. Current options pricing indicates a support level around $40,000, a key psychological price point.
