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Spot Bitcoin (BTC) ETFs are experiencing significant growth as inflows accelerate, fueled by both institutional and retail investors. Data indicates that ETFs launched earlier this year have accumulated over $16.16 billion in inflows, surpassing Bloomberg’s 12-month estimate of $12 billion to $15 billion.
Leading the market is Blackrock’s iShares Bitcoin Trust (IBIT), which has amassed over 316k coins valued at over $18 billion. Fidelity’s Wise Origin Bitcoin Fund (FBTC) follows with over 176k coins. Other notable Bitcoin ETFs include Cathie Wood’s ARKB, Bitwise’s BITB, and Invesco’s BTCO, holding 47,765, 39,420, and 7,197 coins respectively.
In contrast, the Grayscale Bitcoin Trust (GBTC), once the largest Bitcoin ETF, has seen a significant outflow, losing over 18,000 coins this year. This decline is linked to its high fees, with an expense ratio of 1.50%, compared to Blackrock’s IBIT, which charges just 0.25%. For example, a $100k investment in GBTC incurs $1,500 in annual fees, whereas the same amount in IBIT would cost only $250.
GBTC vs FBTC vs ARKB vs IBIT vs BTCO ETFs
Additional data indicates that some of the biggest institutional investors have purchased these Bitcoin ETFs. A recent report revealed that funds like Millennium Management, Susquehanna, Horizon Kinetics, and Jane Street have bought Bitcoin ETFs. Other notable companies include Fortress Investment, Apollo Global, and Farallon Capital.
Millennium is a $68 billion fund managed by billionaire Izzy Englander, while Apollo Global is one of the leading private equity firms globally. Susquehanna, owned by a Trump ally, is also one of the largest investors in TikTok. Combined, the 80 companies identified in SEC filings account for 17% of total ETF holdings. Though not all are institutional investors, a significant number are included.
Viewing ETF inflows solely as retail contributions seems inappropriate.
Will Ethereum ETFs See Similar Success?
These numbers come as investors await the approval of spot Ethereum ETFs. Analysts expect this approval to occur this month. On paper, ETFs tracking Ether should perform well since the coin has a history of outperforming Bitcoin. Over the past five years, Ethereum has surged by over 1,654%, while Bitcoin has risen by 587%.
Additionally, Ether is one of the most liquid cryptocurrencies in the market. The Grayscale Ethereum Trust (ETHE) has accumulated almost $10 billion in assets, though it is a highly expensive fund with a management fee of 2.50%. Spot Ethereum ETFs could be ideal for institutional investors who may struggle with cold wallet keys.
Retail investors in these funds will pay a fee and miss out on staking rewards. Most funds are likely to charge an expense ratio of 0.25%. Ethereum has an annual yield of about 3.26%, meaning that direct Ether investors may fare better than ETF holders.
Consequently, spot ETH ETFs may lag behind Bitcoin in terms of asset inflows. For more updates and detailed analysis on cryptocurrencies, investing, and finance, visit Global Crypto News.
