Less than two weeks after the initiation of ten spot Bitcoin exchange-traded funds (ETFs) in the U.S., it appears to be evolving into a two-horse race for new assets, with BlackRock’s iShares Bitcoin Trust (ticker IBIT) and the Fidelity Wise Origin Bitcoin Fund (FBTC) leading the field. According to the latest available data compiled by Bloomberg, these two funds have garnered approximately $1.9 billion and $1.6 billion in inflows, collectively constituting around 70% of the total spot Bitcoin ETF inflows thus far.
The early dominance of BlackRock and Fidelity underscores the formidable marketing and distribution capabilities of these asset management giants. Their products have successfully found their way into both institutional and retail portfolios, despite Bitcoin experiencing a post-launch decline that led to double-digit losses for IBIT and FBTC. The significant lead held by these two players can be attributed to their distribution strength and brand recognition, advantages that smaller issuers may lack.
Roxanna Islam from ETF data and analytics firm VettaFi notes, “BlackRock and Fidelity have both the liquidity and the brand recognition that some of the other issuers don’t have — especially when it comes to retail investors who are hesitant about investing in an emerging asset class.” She predicts that the gap between BlackRock, Fidelity, and other issuers will likely widen as their volume and assets increase.
While the Bitwise Bitcoin ETF (BITB) follows as a distant third with a $518 million haul, the ARK 21Shares Bitcoin ETF (ARKB), managed by Cathie Wood’s ARK, closely follows with a $509 million influx.
Nate Geraci, president of the ETF Store, acknowledges the strong showing from the middle of the pack, suggesting that there is room for multiple issuers in the spot Bitcoin ETF arena. He emphasizes the significance of achieving $500 million or more in assets under management within two weeks of launch as highly impressive.
All spot Bitcoin ETFs that commenced trading this month have witnessed net inflows, except for the Grayscale Bitcoin Trust (GBTC). While GBTC holds the position of the world’s largest cryptocurrency fund with $22 billion in assets, it has experienced a decline of approximately $4 billion since its conversion into an ETF. The higher fee structure of GBTC, currently at 1.5%, remains a notable factor, especially when compared to competitors like Franklin Templeton’s fund with a post-waiver 0.19% expense ratio, and BlackRock and Fidelity with eventual fees of 0.25% after a waiver period.
Looking ahead, industry experts, including Anthony Scaramucci of SkyBridge Capital, anticipate that BlackRock and Fidelity will continue to dominate the leaderboard in the long term, given their significant sales forces and status as two of the largest players in the ETF space.
