- According to JPMorgan’s research report, spot Bitcoin ETFs from BlackRock and Fidelity seem to have gained an advantage over Grayscale in specific liquidity metrics related to market breadth.
- Grayscale is expected to lose its fund to the newly created ETFs, especially those of BlackRock and Fidelity, unless it makes a significant fee reduction.
- As part of the transformation of its spot Bitcoin ETF, Grayscale reduced its management fee from 2% to 1.5%, but it still charges much higher fees compared to rival offerings.
JPMorgan analysts suggest in their recent report that BlackRock and Fidelity Bitcoin ETFs might stand out.
JPMorgan Publishes Report on Spot Bitcoin ETFs in the U.S.
According to a research report published by JPMorgan on Wednesday, spot Bitcoin exchange-traded funds (ETFs) from BlackRock (BLK) and Fidelity already seem to have an advantage over Grayscale in specific liquidity metrics related to market breadth.
Although the outflows from Grayscale’s GBTC have slowed down in the fourth week after approval by the U.S. Securities and Exchange Commission (SEC), the report suggests that if Grayscale does not make a significant fee reduction, it is expected to lose its fund to newly created ETFs, especially those from BlackRock and Fidelity.
Grayscale charges the highest fees among spot Bitcoin ETF issuers. It reduced its management fee from 2% to 1.5% as part of the transformation into a spot Bitcoin ETF, but it is still much more expensive compared to rival offerings.
Emphasis on two liquidity metrics
Analysts led by Nikolaos Panigirtzoglou said, “Beyond fees, another reason is that BlackRock and Fidelity ETFs already have an advantage over GBTC in terms of two liquidity metrics.”
The first is the representation of market breadth based on the bank’s Hui-Heubel ratio. The value of GBTC is about four times higher than that of BlackRock and Fidelity ETFs, indicating that they exhibit “significantly more market breadth than GBTC.”
The report noted that the second criterion is based on the “average absolute deviation” of ETF closing prices from the net asset value (NAV). Last week, this measurement showed that “the deviation of Fidelity and BlackRock spot Bitcoin ETF prices from NAV approached that of the GLD Gold ETF, indicating a significant improvement in liquidity, while deviations for GBTC ETF remained high, indicating lower liquidity.
