Following the approval of spot Bitcoin ETF (Exchange Traded Funds) in the United States overall cryptocurrency market experienced a massive upside momentum especially the world’s biggest cryptocurrency Bitcoin. It has been observed that following the approval of spot Bitcoin ETF, asset management firm Grayscale’s Bitcoin Trust (GBTC) Bitcoin holdings halved in just 3 months after the ETF launch.
Grayscale current Bitcoin holding
Unlike the newly launched ETFs from asset management giants like BlackRock and Fidelity, Grayscale’s existing GBTC was converted into an ETF, boasting approximately 619,220 BTC at the onset of spot bitcoin trading. However, GBTC charges a higher fee compared to its competitors like BlackRock and Fidelity who are charging 0.12%. Consequently, its Bitcoin holdings have plummeted by approximately 50% to around 311,621 BTC, as disclosed by the fund’s recent reports.
Despite this decline in BTC holdings, GBTC’s assets under management in U.S. dollar terms have experienced a lesser decrease, down 31% from $28.7 billion on January 11, 2024, to $19.8 billion at current prices. BlackRock’s IBIT and Fidelity’s FBTC spot ETFs have emerged as primary beneficiaries in terms of market share by bitcoin holdings. GBTC’s market share has declined from nearly 100% on launch day to just 37.3%, according to a report. However, BalckRock’s IBIT now controls a 32.2% share, with FBTC ranking third at 17.8%.
Collectively, the assets held by all U.S. spot bitcoin ETFs now stand at nearly 840,000 BTC, constituting over 4% of Bitcoin’s total 21 million supply.
How Iran and Israel conflict impact spot Bitcoin ETF market?
In this ongoing geopolitical tension between Iran and Israel, the trading activity on spot Bitcoin ETF is highly impacted. For the last two trading days, BlackRock’s IBIT and Grayscale’s GBTC are the only two ETF products that have experienced trading activity. In the trading activity, IBIT registered inflows of $73.4 million on April 15, 2024, whereas on the same day, GBTC experienced outflows amounting to $110.1 million, resulting in a net outflow of $36.7 million for the day.
This trend follows a series of negative days for GBTC, with $82.5 million leaving the fund over the past week. However, overall net inflows since the beginning of spot Bitcoin ETFs have totaled $12.5 billion.
The recent halt in positive price momentum appears to have instilled a sense of hesitation among investors, as noted by James Butterfill, CoinShares’ Head of Research. FBTC’s streak of 63 consecutive days of inflows came to an end last Friday, while IBIT continues its streak, now at 65 days.
