BlackRock and Fidelity Bitcoin ETFs Dominate Top 10 January Inflows with Massive $4.8B Surge

BlackRock and Fidelity’s spot Bitcoin (BTC) exchange-traded funds (ETFs) have emerged among the top 10 funds with the highest inflows in January.

According to a report from Morningstar research analyst Lan Anh Tran, BlackRock’s iShares Bitcoin Trust (IBIT) secured the eighth position with an estimated $2.6 billion in net flows.

Following closely, Fidelity Wise Origin Bitcoin ETF (FBTC) claimed the tenth spot, attracting $2.2 billion in net flows.

The United States currently houses more than 3,100 ETFs as of December 31, 2023, according to data from YCharts.

The dominance of BlackRock and Fidelity’s funds in terms of inflows highlights the increasing interest in Bitcoin as an investment asset.

GBTC Sees Around $6 Billion in Outflows

In contrast, the report also revealed that the Grayscale Bitcoin Trust (GBTC) experienced significant outflows, with an estimated $5.7 billion exiting the fund in January, marking the second-highest outflows among ETFs.

“Never thought I’d see the day,” Nate Geraci, president of investment advisory firm ETF Store, said.

Two spot bitcoin ETFs among top 10 of *all* ETF inflows in January…

Never thought I'd see the day.

via @MorningstarInc pic.twitter.com/o7L5CEu5Ef

— Nate Geraci (@NateGeraci) February 3, 2024

Geraci further noted that BlackRock and Fidelity’s ETFs have established themselves as the leading contenders in a “clear two-horse race” among the nine new Bitcoin funds.

He also highlighted the potential of other emerging players in the market.

The analyst mentioned the joint ETF from ARK Invest and 21 Shares, as well as Bitwise’s fund, both of which currently manage assets under $650 million.

Geraci predicts that these funds will develop into a “strong middle class” and expects them to reach $1 billion in assets in the near future.

Spot Bitcoin ETFs Record Six Days of Net Inflows

The report from Morningstar comes as U.S. spot Bitcoin ETFs recorded six consecutive days of positive net inflows, totaling nearly $715 million.

The majority of these inflows were driven by BlackRock and Fidelity’s funds, as indicated by data shared by BitMEX Research. 

During the trading days from January 26 to February 2, the inflows into the new spot Bitcoin funds surpassed the outflows from GBTC, which experienced its second-lowest outflow day on February 2, amounting to $144.6 million.

Eric Balchunas, a senior ETF analyst at Bloomberg, noted that the resilience of the nine ETFs, excluding GBTC, was remarkable.

He remarked on their ability to rebound after a dip in the previous week, stating that typically, there is a gradual decline after a hyped launch.

The continued net inflows into these funds during their third week of trading demonstrate their sustained popularity and potential for long-term growth.

Aurelie Barthere, Principal Research Analyst at Nansen, said in a recent interview with Cryptonews.com that she expects lower-fee ETFs to attract more inflows in the short term.

The competitive landscape among Bitcoin spot ETF providers, according to Barthere, will be shaped by factors like reputation, size, existing footprint, and management fees.

“Reputation/size/existing footprint + management fee will probably lead to some leaders dominating the market,” she predicted.

BlackRock has set its fee for the iShares ETF at 0.12% for the first 12 months or until the first $5 billion in assets under management, after which it plans to increase it to 0.25%.

Other issuers, such as ARK Invest, charge 0.21%, VanEck lists a fee of 0.25%, and Bitwise charges 0.20%.