Grayscale's GBTC Faces Competition from Blackrock and Fidelity Spot Bitcoin ETFs: JPMorgan

According to CoinDesk, JPMorgan's recent research report indicates that Blackrock and Fidelity spot bitcoin exchange-traded funds (ETFs) already have an advantage over Grayscale in terms of certain liquidity metrics linked to market breadth. Despite outflows from Grayscale's GBTC slowing down in the fourth week following approval by the U.S. Securities and Exchange Commission (SEC), the fund is expected to lose more funds to the newly created ETFs, particularly Blackrock and Fidelity products, if it doesn't significantly reduce its fees. Grayscale charges the highest fees among spot bitcoin ETF issuers. Although it lowered its 2% management fee to 1.5% during its conversion to a spot bitcoin ETF, it remains more expensive than its competitors. JPMorgan analysts, led by Nikolaos Panigirtzoglou, noted that Blackrock and Fidelity ETFs already have an advantage over GBTC in terms of two liquidity metrics. The first is the bank's proxy for market breadth based on the Hui-Heubel ratio, which is about four times higher for GBTC than for Blackrock and Fidelity ETFs. The second metric is based on the average absolute deviation of ETF closing prices from net asset value (NAV). In the last week, this metric showed that the ETF price deviation from NAV for Fidelity and Blackrock spot bitcoin ETFs approached that of the GLD Gold ETF, implying a significant improvement in liquidity, while the deviations for the GBTC ETF remained high, implying lower liquidity.