The rise of BlackRock and ProShares: The end of Grayscale’s Bitcoin domination, or just a bad run?
James Seyffart, ETF analyst at Bloomberg Intelligence, highlighted on his social networks that BlackRock’s Bitcoin Spot ETF (IBIT) has been the first to surpass Grayscale Investments’ Grayscale Bitcoin Trust or GBTC, in terms of trading volume. Likewise, ProShares’ BITO, on Thursday becoming the first Bitcoin exchange-traded funds (ETFs) to cross GBTC’s trading volume.
Mainly, IBIT ended Thursday with $306 million in completed trades. While BITO negotiated $298 million. GBTC recorded $291 million in transactions.
Grayscale is basically a digital asset management company that offers the Grayscale Bitcoin Trust (GBTC), an investment fund that allows investors to gain exposure to the price of Bitcoin without having to directly own the cryptocurrency.
In January, Grayscale led trading volumes among all Bitcoin ETFs. This means that there were a significant number of transactions and operations related to GBTC compared to other similar funds that track the price of Bitcoin.
Looking at selling pressure in recent weeks, some GBTC investors have been reported to have taken profits and switched to other providers. This means that some investors who previously held GBTC have decided to sell their holdings to make profits and have chosen to invest in other Bitcoin-related financial products offered by different providers. This investor rotation may have contributed to the selling pressure experienced in the market.
GBTC Sales Decline Continues
GBTC’s dominance in spot Bitcoin ETFs was due to strong trust outflows from the first day of trading. This has largely been attributed to investors’ ability to redeem their investment once the product was converted to a spot ETF, something they could not do before.
Additionally, Grayscale’s high fees have caused it to lose more than $5.8 billion in assets since January 11, according to BitMEX Research.
The higher-fee GBTC product has lost more than $5.8 billion in assets in the period, compared with combined inflows of $7.2 billion for the nine newborn ETFs, according to BitMEX Research.
However, this dominance has begun to decline in recent days. Previously, GBTC was sending an average of $700 million in BTC to the Coinbase cryptocurrency exchange, but data from BitMEX Research shows this has totaled less than $300 million since January 26.
As for BTC, there were outflows of 24,050 BTC from GBTC, reducing to 4,461 BTC on January 30 and 4,433 on February 2.
Why BlackRock and ProShares Lead the Way against Grayscale
Since January 11, GBTC had dominated the Bitcoin spot ETF market in terms of daily volumes. Currently, this dominance came to an end on February 1, when BlackRock and ProShares became the first of nine ETFs to surpass GBTC’s trading volume.
In this regard, James Seyffart said the following:
“Still, some after-hours trading left but looks like BlackRock’s $IBIT is the first ETF to trade more than Grayscale’s $GBTC in a single day. Total trading today was kind of a dud though at $924 million — first day below $1 billion in dollar volume for the group since launch.”
On Friday afternoon GBTC regained the leading position on the chart, recording a trading volume of $338 million. Currently, GBTC tops the chart with $377.34 million in trading volume. Followed by IBIT with $254.04 million.
Finally, crypto markets are highly dynamic and can be subject to rapid changes and fluctuations. Therefore, it is important to conduct additional research and consider multiple sources of information before making investment decisions.
By Audy Castaneda
