Bitcoin ETF Mania Fuels BlackRock And Fidelity’s Growth

(CTN News) – As a result of Bitcoin’s blistering rally over the past few months, there has been a record inflow of funds into spot Bitcoin ETFs, cementing the new asset class as an investor favorite.

A new exchange-traded fund known as the “Newborn Nine” — a group of exchange-traded funds that invest directly in Bitcoins — is one in which BlackRock Inc.’s iShares Bitcoin Trust (IBIT) and Fidelity Investments’ Wise Origin Bitcoin Fund (FBTC) have captured 79% of total inflows since the US Securities and Exchange Commission approved the assets on January 10.

According to a Bloomberg analysis of data from the funds’ websites, four of the remaining seven funds responded by cutting their fees below those of the two leaders, according to a analysis of data from their websites.

Valkyrie Investments almost halved the fee it imposed right before the SEC approved its application to 0.25% from the previous 0.49%. Following a ten basis point reduction in its initial management charge, Franklin Templeton is now offering a sector-low yield of 0.19%. It is only Bitwise that has not changed since last year.

There are no signs of bitcoin slowing down in the near future. It has already topped $63,000 as retail investors, wary of missing out, purchased the new ETFs.

Fund managers are likely to see continued bifurcation among themselves in the future, as firms push to lock down market share in a burgeoning asset class.

There is likely to be more concentration among the top ETFs in the future, said Bryan Armour, director of passive strategies research at Morningstar Inc. “But other ETFs won’t go down without a fight,” he added. In order to maintain their advantage, it is imperative that fee wars continue, which will put pressure on the leaders to maintain their lead.”

In its decision to maintain a higher management fee than its new rivals since its Bitcoin trust converted into an ETF, Grayscale Investment has taken a different approach since its Bitcoin trust converted into an ETF.

There has been an outflow of over $8 billion from its fund (GBTC) since the launch of the fund four years ago, Bloomberg data shows.

SEE ALSO:

A Nationwide AT&T Outage Is Being Investigated By The NY AG