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⚡Fidelity's Bitcoin ETF Hits Stride with $208M Inflows💉

Croxroad

30 Jan 2024 — 4 min read

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🔄 Fidelity's Bitcoin ETF Shines Bright with $208M Inflows

Fidelity's Bitcoin exchange-traded fund (ETF) had a pretty good day on January 29. It pulled in $208 million in daily inflows, which is more than what Grayscale Bitcoin Trust (GBTC) saw flowing out on the same day. This is the first time Fidelity has outpaced Grayscale since their launch day. The GBTC outflows dropped by almost 25% from $255 million on January 26, and it's a substantial 70% drop from its peak daily outflows of $641 million on January 22.

Interestingly, Fidelity's success comes at a time when people are closely watching for any slowdown in GBTC outflows. Some analysts from JPMorgan think that the downward pressure on Bitcoin caused by GBTC outflows should be mostly over by now.

On the same day, nine new U.S. spot Bitcoin ETFs together hit nearly $1 billion in volume, almost doubling the volume of GBTC, which had $570 million in volume. Among these new ETFs, BlackRock's iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC) led the pack in terms of volume, bringing in $460.9 million and $315.4 million, respectively.

The competition in the market for spot Bitcoin ETFs has gotten so intense that some fund issuers are cutting fees to attract investors. Invesco and Galaxy Asset Management recently dropped the fees on their joint ETF, Invesco Galaxy Bitcoin ETF (BTCO), from 0.39% to 0.25%. This move brings their fees in line with other big players like BlackRock and Fidelity. There's even a fee war going on in Europe, with some traders speculating that investors are moving from Europe-based products to the U.S. ones. It seems like the race to lower fees is on in the ETF world.

⚫ Bitcoin Gains Momentum

Bitcoin started the day at around $43,427 and managed to hang onto the $42,000 mark when Wall Street opened on January 29. However, there were fresh concerns as new outflows from exchange-traded funds (ETFs) began.

Bitcoin's price had dipped from the weekend high of $42,800, and despite a positive weekly close, it faced some challenges at the beginning of the new week. Outflows from the Grayscale Bitcoin Trust (GBTC) resumed, totaling $360 million on the day. This is a bit less than before, and it's around 50% of the peak daily outflows.

Bloomberg Intelligence analyst James Seyffart noted that over $5 billion had left GBTC since its conversion to an ETF. On January 26, despite the headwind from GBTC, total net inflows into spot Bitcoin ETFs reached $759 million.

On another note, BlackRock's iShares Bitcoin Trust (iBIT) ETF was holding more than 52,000 BTC, valued at over $2 billion.

Looking ahead, the crypto market was cautiously optimistic but bracing for potential volatility, especially with the United States Federal Reserve's decision on interest rates scheduled for January 31. Many were closely watching the Federal Open Market Committee (FOMC) meeting, with expectations that it could set the stage for rate cuts starting in March. The market seemed to be betting heavily that the Fed would maintain rates at this meeting, but the real focus was on what Fed Chair Jerome Powell might reveal in the post-announcement press conference. That, it seems, could move the markets pretty quickly.

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