BlackRock and Fidelity’s Bitcoin ETFs Outperform Grayscale on Liquidity Metrics, says JPMorgan
JPMorgan analysts claim that BlackRock and Fidelity’s Bitcoin ETFs outperform Grayscales’ GBTC across at least two liquidity metrics.
JPMorgan finance corporation’s analysts observed that Bitcoin exchange-traded funds (ETFs) offered by asset management companies BlackRock and Fidelity are outperforming Grayscale Bitcoin Trust (GBTC), the largest fund in terms of assets under management, across at least two liquidity metrics.
The initial metric, JPMorgan’s proxy for market breadth based on the Hui-Heubel ratio, indicates that BlackRock and Fidelity ETFs have a significantly lower ratio, approximately four times less than GBTC, suggesting broader market participation for these two ETFs.
The second metric evaluates the average deviation of ETF closing prices from their net asset value (NAV). According to analysts, this measurement indicates that the ETF price deviation from the NAVs of Fidelity and BlackRock spot Bitcoin ETFs recently approached that of the Standard and Poor’s Depositary Receipts (SPDR) Gold Shares ETF, suggesting a notable enhancement in liquidity.
Meanwhile, analysts noted that deviations for the GBTC ETF have consistently remained higher, signifying lower liquidity for this particular ETF.
While these two metrics may not encompass all aspects of market liquidity, specifically market depth, there is already observable evidence suggesting that BlackRock and Fidelity’s Bitcoin ETFs hold an advantage over GBTC in specific liquidity metrics related to market breadth, as highlighted by the analysts.
The analysts also 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.
Grayscale’s Bitcoin ETF Experiences Outflows, BlackRock and Fidelity Take the Lead
Grayscale’s fund, being a conversion to the ETF rather than a completely new product, has shed billions of dollars, dropping from an initial more than $25 billion in assets under management. Regarding total trading volume, which encompasses buying and selling activities, the recently launched spot Bitcoin ETFs from BlackRock and Fidelity have secured the second and third positions, following Grayscale.
Since trading commenced in January, the three issuers have consistently dominated the total trading volume, occasionally representing around 90% of all buying and selling activity. In contrast, other spot Bitcoin ETFs, such as those provided by Invesco and Galaxy, Franklin Templeton, and Ark Invest, have lagged far behind the top three in terms of market participation.
Grayscale’s ETF witnessed a decline of over $5 billion in assets under management, whereas the products from BlackRock and Fidelity maintained a net positive value, surpassing $2 billion.
The recent outperformance of BlackRock and Fidelity’s spot Bitcoin ETFs over GBTC across several liquidity metrics signals potential changes in investor preferences and market trends.
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