According to JPMorgan, BlackRock, and Fidelity’s spot bitcoin, exchange-traded funds (ETFs) already possess an advantage over Grayscale Bitcoin Trust (GBTC), which holds the largest assets under management, particularly in two liquidity metrics. Despite a slowdown in outflows from Grayscale’s GBTC during the fourth-week post-approval by the U.S. Securities and Exchange Commission (SEC), JPMorgan anticipates the fund will trail behind the newly established ETFs, specifically those from BlackRock and Fidelity, unless it implements significant fee reductions, as stated in the report.
The first metric, JPMorgan’s gauge for market breadth based on the Hui-Heubel ratio, indicates substantially lower figures for BlackRock and Fidelity ETFs compared to GBTC, approximately four times less, signifying broader market coverage for these ETFs, according to the report penned by JPMorgan analysts led by Nikolaos Panigirtzoglou on Wednesday.
The second metric evaluates the deviation of ETF closing prices from their net asset value on average. Analysts note that the ETF price deviation from the net asset values of Fidelity and BlackRock’s spot bitcoin ETFs nearly mirrors that of the SPDR Gold Shares ETF in the latest week, indicating a marked improvement in liquidity. Conversely, deviations for the GBTC ETF remain higher, indicating lower liquidity.
Furthermore, the report highlights that without a reduction in GBTC fees, the fund is likely to experience more outflows and lose assets to alternative ETFs, particularly those offered by BlackRock and Fidelity.
On an another note,
Grayscale CEO Calls for Approval of Options Trading for Bitcoin ETFs
Grayscale’s CEO emphasized the benefits of options for investors, citing their role in facilitating price discovery and navigating market dynamics. In a post on Feb. 5, Grayscale CEO Michael Sonnenshein advocated for regulatory approval of exchange-listed options for spot Bitcoin exchange-traded funds (ETFs). He asserted that options offer value to investors by aiding in “price discovery and can help investors better navigate market conditions or achieve desired outcomes, such as generating income.”
An exchange-traded option represents a standardized contract enabling the purchase (via a call option) or sale (through a put option) of a specified quantity of a particular financial asset at a predetermined price (the strike price) on or before a specified date. Options trading allows investors to forecast the future movement of specific stocks, bonds, or the broader stock market. Within options contracts, traders have the freedom — though not the obligation — to buy or sell an underlying asset by a specified date at a predetermined price.
Sonnenshein highlighted that when the SEC sanctioned the first Bitcoin futures ETF in October 2021, listed options for the ETF became available for trading the following day thanks to automatic effectiveness, which allowed them to adhere to existing regulations.
