JPMorgan: BlackRock – Fidelity Bitcoin ETFs Outperform Grayscale on Liquidity

Bitcoin ETF

JPMorgan analysts suggest that BlackRock and Fidelity’s Bitcoin ETFs are performing better than Grayscale’s GBTC on at least two measures of liquidity.

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Analysts at JPMorgan noticed that Bitcoin exchange-traded funds (ETFs) from BlackRock and Fidelity are surpassing Grayscale Bitcoin Trust (GBTC), which is the largest fund by assets under management, in terms of at least two measures of liquidity.

BlackRock, Fidelity Bitcoin ETFs Beat GBTC in Liquidity: JPMorgan

According to analysts at JPMorgan, BlackRock and Fidelity’s Bitcoin exchange-traded funds (ETFs) are showing superior performance compared to Grayscale Bitcoin Trust (GBTC) in terms of liquidity metrics. One such metric, known as the Hui-Heubel ratio and used as a proxy for market breadth, reveals that BlackRock and Fidelity ETFs have a much lower ratio, about four times less than GBTC. This suggests broader market participation for these two ETFs.

Another significant metric examines the average deviation of ETF closing prices from their net asset value (NAV). Recent data indicates that the ETF price deviation from the NAVs of Fidelity and BlackRock spot Bitcoin ETFs closely approached that of the Standard and Poor’s Depositary Receipts (SPDR) Gold Shares ETF. This implies a notable improvement in liquidity. In contrast, deviations for the GBTC ETF have consistently remained higher, indicating lower liquidity.

While these metrics may not cover all aspects of market liquidity, they do highlight observable evidence suggesting that BlackRock and Fidelity’s Bitcoin ETFs hold an advantage over GBTC in specific liquidity metrics related to market breadth.

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Furthermore, analysts pointed out that unless GBTC reduces its fees, there is a likelihood of increased outflows, with funds moving towards other ETFs, particularly those offered by BlackRock and Fidelity.

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BlackRock, Fidelity Bitcoin ETFs Surpass Grayscale: JPMorgan

Grayscale’s fund, initially valued at over $25 billion, has experienced a significant decrease in assets under management as it transitions to an ETF. Meanwhile, BlackRock and Fidelity’s spot Bitcoin ETFs have emerged as strong contenders, ranking second and third in total trading volume, trailing behind Grayscale.

Since their launch in January, these three issuers have consistently dominated trading volume, capturing around 90% of all buying and selling activities. In contrast, other spot Bitcoin ETFs from Invesco, Galaxy, Franklin Templeton, and Ark Invest have lagged behind in market participation.

While Grayscale’s ETF has seen a decline of over $5 billion in assets under management, BlackRock and Fidelity’s products have maintained a positive trajectory, surpassing $2 billion.

The recent superior performance of BlackRock and Fidelity’s spot Bitcoin ETFs compared to GBTC across various liquidity metrics suggests a potential shift in investor preferences and market dynamics.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.


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