According to a report from JPMorgan, the spot bitcoin exchange-traded funds of BlackRock and Fidelity are outperforming the largest fund by assets under management, Grayscale Bitcoin Trust (GBTC), in terms of liquidity. Two liquidity metrics were used to determine this edge. The first metric, based on the Hui-Heubel ratio, showed that BlackRock and Fidelity ETFs have significantly more market breadth compared to GBTC. The second metric, measuring ETF closing prices deviation from their net asset value, indicated that the ETF price deviation from the NAVs of the Fidelity and BlackRock spot bitcoin ETFs approached that of the SPDR Gold Shares ETF, suggesting a significant improvement in liquidity.
The JPMorgan analysts also pointed out that if GBTC fees aren’t reduced, the fund will likely see more outflows and lose funds to other ETFs, especially BlackRock and Fidelity’s bitcoin ETFs. This report sheds light on the advantage that BlackRock and Fidelity’s bitcoin ETFs have over Grayscale Bitcoin Trust (GBTC) in certain liquidity metrics related to market breadth. It is noted that these two metrics may not capture all dimensions of market liquidity, particularly market depth, but they do indicate an advantage for BlackRock and Fidelity. As the popularity of spot bitcoin ETFs grows, it will be important to monitor how the liquidity metrics and advantages of different funds continue to evolve.