Recently, the Grayscale Bitcoin Trust (GBTC) seems to have gone through a lot of ups and downs.
Here’s what happened: GBTC was traditionally the best choice for people who wanted to invest in Bitcoin without buying it directly.
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But then other companies started introducing their own Bitcoin ETFs in January — nine of them, to be exact. This meant investors suddenly had more options than ever before, and they didn’t seem to like GBTC as much anymore.
After months of money flowing out of GBTC, this time it actually got some love. On a single Friday last week, there was a net inflow of $63 million into GBTC, according to Farside Investors. That’s important because it’s the first day since January that more money went into GBTC than came out.
No longer is GBTC sitting pretty at the peak of the Bitcoin ETF mountain. BlackRock’s iShares Bitcoin Trust (IBIT) has entered the race. IBIT has been making its way up and now it’s right behind GBTC for the title of biggest Bitcoin ETF.
It amazes me how fast things can change in investing. A few months ago, GBTC was number one with over $26 billion in assets under management (AUM). Even now it still has $18.1 billion AUM but that amount is being threatened by IBIT which boasts $16.9 billion.
Why such a sudden change?
Fees and rivals is where it all boils down to. In comparison to other similar products, GBTC charges higher fees and when investors caught on they started searching for better options too. As well as this, seeing that there are now many different bitcoin EFTs available people have become less dependent on any particular one like GBTC used to be.
Notwithstanding, Bitcoin ETFs remain a game-changer for people like us who would like to test the cryptocurrency waters without immersing themselves completely. Granted that there are risks involved; aren’t such things thrilling though?
I must say, it’s kind of sad to see GBTC lose its luster like this. It was the first-ever Bitcoin ETF after all. But well, competition is good isn’t it? It compels firms to do better and provides investors with more alternatives.
Personally, I have my sights set on both GBTC and IBIT. Maybe I’ll shake things up and split my investments between them; you never know. After all, they say that in finance diversification pays off don’t they?
In the final analysis, whether you’re team GBTC or team IBIT or simply observing from afar as myself; one thing remains certain – Bitcoin ETFs have never been boring. And as far as there is creativity coupled with healthy rivalry; then am anxious to witness what lies ahead for us along this route.
Posted Using InLeo Alpha