BlackRock and Fidelity Challenge Grayscale in Bitcoin ETF Showdown as iShares Holdings Surpass 50,000 BTCs

• BlackRock and Fidelity are emerging as strong competitors in the Bitcoin ETF market, challenging the dominance of Grayscale.
• iShares’ holdings in Bitcoin have surpassed 50,000 BTCs, marking a significant milestone in the cryptocurrency ETF sector.

On Monday, January 29, 2024, the Bitcoin ETF market witnessed a significant development as the 10 spot Bitcoin ETFs recorded their first net inflows in a week, propelling the price of Bitcoin to its highest level since the inception of these funds.

Notably, this day could be a turning point, as one of the recently launched ETFs surpassed the trading volume of Grayscale’s Bitcoin Trust (GBTC), with the former reaching $155 million compared to GBTC’s $113 million.

Bloomberg’s cryptocurrency analyst, James Seyffart, highlighted this shift in market dynamics in a recent tweet, pointing to the growing competition in the sector.

$GBTC retains the liquidity crown again as it pulls away from peers into the home stretch https://t.co/3VP8gLcDbL pic.twitter.com/PlOkH6ohSx

— James Seyffart (@JSeyff) January 30, 2024

Moreover, my analysis further underscores the changing landscape. Within just an hour of trading, BlackRock’s Bitcoin ETF, IBIT, outperformed Grayscale’s Bitcoin Trust in terms of trading volume, indicating a strong market interest in the new entrants.

Just an hour into trading, and #BlackRock's #BitcoinETF $IBIT has taken the lead in volume over #Grayscale's #Bitcoin Trust. Today might mark the first time when one of the "newborn nine" trades more than $GBTC, with current volumes at $155 million compared to $113 million! pic.twitter.com/MfPtppWuFx

— Marcel Knobloch aka Collin Brown (@CollinBrownXRP) January 30, 2024

Recent trading data underscores the rise of BlackRock and Fidelity as formidable players in the cryptocurrency ETF arena. These financial behemoths have started to eclipse Grayscale in daily trading volumes, signifying a pivotal shift in market preferences and a new era in the cryptocurrency ETF market.

Despite experiencing a slowdown in net outflows, Grayscale’s Bitcoin Trust (GBTC) saw the overall ETF market add over 4,200 bitcoins to their holdings, valued at approximately $183 million, in a single day.

This is in stark contrast to the previous week, which saw continuous net outflows, with around 20,000 bitcoins withdrawn from the funds between January 23 and January 26. The last net inflow before this was on January 22, when the ETFs collectively added just over 1,200 bitcoins.

Research from BitMEX indicates that outflows from GBTC have been decelerating since the launch of the new spot ETFs. In the initial six days following the introduction of the spot ETFs, the fund experienced an average of $470 million in withdrawals. By Monday, this figure had reduced to $192 million, highlighting the shifting investor sentiment towards these new investment vehicles.

BTC currently trades at $42,594, having shed 2.09% in the past day and increased by 4.90% in the past week, as shown in the chart below.