BlackRock and Fidelity Bitcoin ETF liquidity outperforms Grayscale: JP Morgan | CoinDesk JAPAN

• Grayscale's outflows from GBTC slowed in the fourth week after the SEC approval.
• Still, if GBTC doesn't lower its fees, it's likely to lose money to new spot Bitcoin ETFs.
• BlackRock and Fidelity ETFs also have an advantage over Grayscale when it comes to liquidity metrics that track market breadth.

BlackRock and Fidelity's Spot Bitcoin (BTC) Exchange Traded Fund (ETF) already has an advantage over Grayscale when it comes to liquidity metrics related to market breadth, says JP JPMorgan said in a February 7 research report.

Although outflows from the Grayscale Bitcoin Trust (GBTC) have slowed in the fourth week following U.S. Securities and Exchange Commission (SEC) approval, the fund remains in the lurch without significantly lowering its fees. Newly created ETFs are expected to lose out, particularly those from BlackRock and Fidelity, the report said.

Grayscale has the highest fees among Bitcoin Spot ETF issuers. As part of its conversion from trust products to spot ETFs, it lowered its 2% management fee to 1.5%, but it's still much higher than rival products.

Analysts led by Nikolaos Panigirtzoglou said, “The reason other than fees is that BlackRock and Fidelity ETFs already have an advantage over GBTC on two liquidity metrics.'' It's about being there,” he said.

The first is a market breadth indicator based on the Hui-Heubel ratio. GBTC's value is about four times that of the BlackRock and Fidelity ETFs, suggesting that BlackRock and Fidelity “represent a much broader market breadth than GBTC.”

The second metric is based on the “average absolute deviation” of the ETF's closing price from its net asset value (NAV).

Last week, the index reported that the ETF price deviation from NAV for Fidelity and BlackRock Spot Bitcoin ETFs approached that of the GLD Gold ETF, suggesting a significant improvement in liquidity, while GBTC's deviation remained high. “This suggests a decline in liquidity,” the report added.

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: Shutterstock
｜Original text: Blackrock, Fidelity Bitcoin ETFs Have a Liquidity Edge Over Grayscale: JPMorgan